In the first two posts in this series (Part 1 and Part 2), I introduced Biznet Solutions, one of a handful of highly focused supplier performance management vendors and one of the only ISVs with a dedicated focus in the procurement area (plus a strong following in at least one vertical market segment). Years ago, Apexon competed in this market, attempting to serve the diversified manufacturing market, with an idea that I believe was well ahead of the market's willingness to embrace SPM.
At the time, I had the chance to work with Apexon and interview/get to know one of its early customers, an industrial manufacturer. Even though I personally believe the business case for solutions like Biznet should be cut and dry, history shows that all too often, advanced scorecarding and performance management efforts seem to fall through the cracks as organizations prioritize other areas of focus (e.g., supplier risk management, which should be part of a thorough performance management and monitoring effort, yet often takes individual priority because of a single supply disruption or other supply chain malady gets the attention of executives).
One of the best ways of making the case for these programs independent of other procurement and supply chain collaboration initiatives (let alone, the technology, which is such a small component of overall cost), is to step back for a minute and look at the basics of why some of these efforts don't work. I'm going to steal some material I co-authored for Apexon nearly five years ago since it's no longer in the public domain (and Apexon is no longer around) to highlight some of the challenges of getting organizations to rally around SPM programs. At the time I wrote, "the greatest issue plaguing SPM programs is that the majority of organizations who have gone through such efforts come up short. At the same time, they spend far more time than they originally thought such efforts would take. Why?"
We zeroed in on a handful of key reasons at the time, usually rolling up to the following types of statements from procurement and quality types:
- "Our data and analysis and collection efforts are taking months, not days."
- "We have had a difficult time rolling-up supplier performance data from our systems with scorecard-based feedback and analysis"
- "Coordinating internal functions (engineering, procurement, operations) during our effort is incredibly challenging"
- "Our technology does not include flexible analytics to get at the level of analysis that we need to make the best decisions"
- "Making our SPM efforts actionable is proving challenging"
Fortunately, Biznet and other top SPM solutions today can address these points head on. Yet based on our past research and the long-memory of manufacturing types, I suspect the march to holistic SPM beyond performance management lip service in industrial markets may take some time. But owning to Biznet's success in oil and gas, an industry where collaboration, health and safety and general risk and vendor management is so critical to success (or not, as the recent tragedy of the Deepwater Horizon shows), that they'll be ready to serve the needs of the manufacturing companies when more companies prioritize SPM just as much as they do strategic sourcing and purchasing automation approaches.
In the meantime, if you're serious about pursuing SPM, you owe it to yourself to talk to Biznet, regardless of which industry background you come from. Other top scorecarding and SPM vendors with broader suites include BravoSolution and Emptoris, yet the nuance of what Biznet has done, especially on an industry level, warrants special attention. Organizations may also wish to consider offerings from Hiperos (another top provider), AECSoft, CVM Solutions, Aravo and Xcitec. Of course you could go to the hundred other or so performance management and scorecarding providers (including SAP, which has at least three different product lines with some degree of scorecarding capability, Ariba or Oracle), but I suspect you'll end up encountering at least some of the same challenges highlighted by those whose SPM efforts came up short in the past if you're truly serious about embracing SPM as a top procurement initiative.
Interest piqued? Curious to learn more about putting SPM programs into action? Download Spend Matters latest Compass research brief in the supplier performance management and scorecarding area:
- Jason Busch