At the Emptoris Empower event last week, one thing was clear to nearly everyone in the audience -- collectively, most in the group lacked adequate visibility into their supply base. Granted, many had implemented -- or were in the process of implementing -- a spend visibility solution, but when it came to monitoring their entire supply base (not to mention their suppliers' suppliers) in the areas of financial, operational and compliance risk, performance, diversity and other areas, nearly everyone in the group came up short. And Emptoris customers, in my view, represent a good portion of the early adopters and innovators when it comes to buying and deploying sourcing and supply management solutions.
But at least some in the group are not sitting still when it comes to thinking about the future of how supplier information can help. The main challenge, though, is that they can't tap an Emptoris -- or an Ariba or SAP for that matter -- today to solve their supplier information challenges. Rather, they must piece together content solutions from multiple providers, and even then, chances are that significant gaps will remain. I suspect this will change, however. It's no secret that D&B plans to aggressively go after the supplier information space. In an earning call from this summer, D&B's COO notes that one of their largest segments, risk management, "includes 2 points of growth" one of which is supply management. In D&B's words, this reflects "our decision to focus on supplier risk as part of our risk management suite."
I did some more homework and found that in an investor day presentation from later in the summer, D&B goes even further in their commitment to pursuing this sector. In it, they note that "our largest strategic stake is to grow Risk Management Solutions". And one of three of their Risk Management initiatives is to drive growth around "Supplier Risk and Supplier Analytics". D&B's plan for supplier risk is to help companies "know suppliers in a global supply chain, comply with regulations and reduce cost". And from an analytics perspective, their plan is to help companies "make faster and more consistent decisions, lower costs of credit reviews and reduce risk exposure."
Many folks who are new to reading about this sector might ask: so what? I'll try to answer why. Historically, supply management has been an outcast stepchild for D&B. But the fact that D&B's top two executives are now promising investors growth from the area clearly shows that D&B has some big plans for the space -- and finally views the market need as significant. I believe that D&B is not alone in their thinking. When I was at Ariba LIVE earlier in the year, a number of people at the solution provider expressed their interest to see Ariba become more of a content and information clearinghouse for the sector. I suspect other vendors will be getting in the game as well, joining other content players such as CVM Solutions, AECsoft and Equifax (Austin Tetra). All of this is good news for companies that are beginning to think about how best to improve their access to supplier information beyond just basic spend visibility. But given the pace of change in the global economy and the credit markets, this expanded interest and investment won't come a minute too soon.
- Jason Busch