Beroe: Rising to Meet Category and Market Intelligence Needs (Part 1)

In recent years, as commodity and global supply markets have realized greater volatility than many of us have ever witnessed in our lifetimes, I've become increasingly convinced that procurement and supply chain organizations need better access to category and supply market intelligence to make better savings and cost avoidance decisions, reduce supply risk and deliver greater overall value to the business. Consider the massive fluctuations in base metals markets -- in some cases exceeding over 200% -- or the energy and oil markets. Or consider how the Chinese price for certain categories has increased by 10% or more in recent years thanks to a combination of import / export tariffs, rising labor rates and the volatility of transportation costs.

Within this environment, I've observed that an increasing number of procurement organizations are creating new budget line items for commodity, category and global supply market intelligence. One of the beneficiaries of this has been Beroe, an offshore provider focused on the knowledge process outsourcing (KPO) of procurement and supply chain market intelligence. I recently had the chance to catch up with Beroe's founder and CEO, Vel Dhinagaravel, who shared his philosophy and approach to delivering these types of information solution to companies. Incidentally, Vel is one of Professor Robert Handfield's former students (Dr. Handfield sits on the board of Beroe and is listed as "Chief Strategic Counsel & Director" on their website).

Beroe has over 200 analysts focused exclusively on customized market intelligence and risk mitigation services in the procurement area. They compete in a market with many substitute offerings but little direct competition. For example, there are higher-level executive advisory offerings from the Corporate Executive Board (Procurement Strategy Council) as well as the Procurement Intelligence Unit (PIU), an upstart in the UK, both of which go beyond management advisory and direction and touch on category and commodity intelligence as well. There are also vertical specific market intelligence offerings from folks like PowerAdvocate (watch for a forthcoming write-up on PowerAdvocate's market intelligence solutions). Otherwise, there are specialist services like Spend Matters' affiliate MetalMiner, offering price forecasting content and dashboards (and recommended sourcing strategies) for base metals and global proprietary commodity indices. Finally, there are more direct competitors such as Denali Intelligence and The Smart Cube that leverage offshore analysis as well, delivering a combination of customized and or standard reports.

In subsequent posts on Beroe, I'll discuss the more specific characteristics of their offerings as well as how organizations consume and use their organization. But if we first look at them by the numbers, it becomes quite clear that this is an organization with some pretty significant and fast growing scale and bench strength behind it. Vel suggests that Beroe will have over 300 analysts by the end of 2010. They also have over 950 experts in different commodity, geographic and related markets who provide insight as well on a retained basis. Beroe works with over 145 clients today, including over 60 of the Fortune 500. But perhaps most telling is that 11 of AMR's top 25 supply chain organizations use Beroe's market intelligence services.

Beroe segments their offerings into three business units: Intelligence, Risk and Green. Intelligence is the largest driver of their business. Through Beroe's intelligence services, companies gain access to a variety of reports (deep-dive and more surface level), negotiation support and category dashboards that provide insight and content to support decision frameworks. Beroe is not, however, pushing canned offerings. They go to great lengths to explain the customized nature of their intelligence services tailored by client and industry. Still, they aim to provide true turnkey services that procurement organizations can plug into their existing practices across their sourcing and supplier management lifecycles. Beroe segments their research model into three areas to provide coverage and depth: strategic research domains, knowledge management (comprising a separate team that looks at a broader portfolio of overall company spend across categories, geographies, etc.) and dedicated industry-focused practices.

Stay tuned for further analysis of Beroe's capabilities as we examine their offerings more closely in subsequent posts in this series.

Jason Busch

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