Beroe: Rising to Meet Category and Market Intelligence Needs (Part 2)

In the first post in this series examining Beroe's approach to delivering category and market intelligence offerings to procurement organizations, I provided a high-level summary of the firm and its approaches. In today's continuation, I'll take the topic down a few levels by getting into the type of insight and actionable intelligence that third-party knowledge process outsourcing (KPO) providers like Beroe can offer and the difference it can make from a sourcing and supplier management standpoint.

One of Beroe's guiding principals is to support procurement organizations at every phase of the sourcing, contracting and supplier management lifecycle. This involves providing intelligence that "feeds all stages" of activity. Depending on client needs, this may start with a structural analysis of a commodity or supply market -- and how it may evolve in the quarters and years to come. Or it may take the form of ongoing updates on a particular commodity or supply market environment after a contract is in place.

Regardless of the structure a deliverable takes (e.g., category management dashboard, PowerPoint, Excel cost breakdown model), Beroe believes that it must offer market intelligence that provides a level of understanding that is actionable and crosses over enough categories while providing sufficient depth to support even commodity experts inside client organizations. Beroe typically engages with a client based around a set number of project deliverables throughout the course of an agreement (e.g., 150 or 750 discrete work products).

The deliverables typically support three different types of initiatives:

  1. Category analysis for sourcing programs -- these often take the form of longer documents including commodity, supply market, supplier and other detailed analyses to support specific sourcing efforts
  2. Support for team members managing categories not being sourced -- these deliverables often support procurement team members that do not have the bandwidth to actively source and manage all categories but still need intelligence around which opportunities to pursue and monitor
  3. Supply chain risk -- Beroe provides a combination of quantitative information (e.g., financial analyses/ratios), qualitative analysis, market dynamic analysis (e.g., capacity utilization) and financial simulation to assist procurement organizations in evaluating the relative risk in their supply bases

Not all of Beroe's clients leverage their offerings to support all three types of initiatives. Moreover, the audience for different types of information can vary between users as well, based on the granularity of the view provided. In general, category managers leverage Beroe for deeper commodity and category intelligence while procurement directors and executives are more interested in portfolio views into overall category and sector trends. A smaller but material percentage of Beroe's work is dedicated to providing industry best practices and competitive views more akin to what a Procurement Strategy Council report might contain.

Beroe's coverage spans both direct and indirect materials as well as services. There's a fairly even split between direct and indirect. Beroe shared during our conversation that "close to 50% of its analyses today are focused on indirect, services, IT or outsourcing," with the remainder focused on direct materials. In any given year, they analyze some 2,000 sub-categories of spend for clients. Some of this analysis is beginning to transcend traditional supplier, category and supply risk insights and is focused more on green efforts and sustainability as well. For example, some organizations are leveraging Beroe to help calculate the carbon footprint of their supply chains and different supply options.

In the final post in this series, I'll comment on the depth, quality and insight that Beroe's specific deliverables provide. My initial views (based on a sampling of some of the materials that I have examined) suggest that Beroe's material could be invaluable if used in the proper manner. In short, I've concluded that it's fine to outsource aspects of information gathering and market intelligence, but not the ownership of the process or the analysis itself. It's my hypothesis that organizations using Beroe most effectively are treating them as an intelligence partner to enhance their own internal efforts and teams rather than as an outsourced provider who will take ownership of the category and market intelligence role in its entirety.

Jason Busch

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