SAP to Source Risk Data From Cortera, Endorsing an Upstart Content Enrichment Provider (Part 4)

Please click here for Part 1, Part 2, and Part 3 of this series.

In the final installment of our coverage of SAP's recent content partnership with Cortera, we'll feature an interview with Jim Swift, President and CEO of Cortera.

Jason: How did the partnership with SAP come about? Are you planning to work with other providers as well?

Jim: I got to know Zia Yusef at SAP a couple of years ago, and found that we believed there was a need to drive better risk management insights about companies through various SAP platforms. Zia explained Cortera to others at SAP, and before long, John Jensen and Thad Dungan picked up the torch. While our insights about companies have many applications across the SAP solutions, it became clear that the highest-demand solution to start with was in the supplier risk management area.

As far as working with others, partnering with SAP is a powerful way for us to increase our presence in the supplier risk management market. Their products are well respected and their customers tend to represent the most sophisticated segment of the market. Our teams have worked closely together to create a solution we believe SAP's customers will find valuable in maintaining supply chain continuity. Over time, with the wide applicability of our products and our pricing philosophy that makes them affordable for companies of all sizes and our open API, we expect to see an expansion to other platforms as well.

Jason: Do you see procurement and supply chain organizations using your risk data in a similar (or different) way that companies use it on the credit and sales side?

Jim: Cortera has specialized in supply chain risk management for many years. The supply chain consists primarily of manufacturers, distributors, retailers and transportation companies that move goods between the companies. The supplier/customer relationships between these players must work effectively in both directions for goods and cash to flow with minimal friction. When goods or cash flow friction builds, companies spend their time worrying about being paid or supplied, and growth screeches to a halt.

Cortera's initial focus was on the customer risk management side of the customer/supplier equation. There were two primary drivers for this: volume (companies tend to have more customers than suppliers), and market readiness (companies have historically been more sophisticated in managing customer risk than supplier risk).

Customer risk management and supplier risk management have many parallels and similarities from an information standpoint. Most significantly, in my view -- while risk assessment of a customer or supplier during onboarding is important, the ongoing monitoring of customers and suppliers is even more crucial to supply chain (goods flow and cash flow) continuity. The insights desired are largely common as well. How many known suppliers does a company have? How reliably does it tend to pay them? Is that payment behavior changing? Are they spending more or less money shipping products? Are there news articles about their operations, organization or products that suggests an increase or decrease in risk? Are there public records such as tax liens providing risk clues? And so on.

In customer and supplier risk management, timeliness of insights and depth of information available for investigation are key. Is there a clue that I need to be aware of? If so, let me dive deeper and investigate. Technology advances allow us to process information at a significantly greater scale and frequency than ever before, and there's an explosion of new forms of risk clues from many sources, including the Web. Cortera sees these as ingredients to enable leaps in risk management innovation.

Jason: Are you planning to offer any truly supply risk-specific offerings in the future, distinct in their content and presentation from the rest of your business? If so, what is the timeline?

Jim: We believe that our current business risk information provides a valuable set of supplier insights today, but we expect to aggressively evolve our offerings to be more supplier risk-specific, particularly in tailoring monitoring features, analytics and benchmarks in the near-term. We already provide a wealth of data that can be leveraged in many ways. Longer-term, we see opportunities to create new data assets that enable yet another level of more powerful analytics.

I believe you'll see us incorporate new supplier-specific features before the end of the year and continue rapid product innovation going forward. We release new versions of our products every three weeks. The ability to move fast on the development front allows us to quickly implement new features as we identify opportunities in the market or cook up new data products and features on our own. It's really fun to be able to bring ideas to reality as quickly as we're able to.

Jason: Do you have any use cases so far about how your system has provided early warning to customers on the supplier side, allowing them to take action before a supply disruption?

Jim: Companies use our information products in a variety of ways, including gaining new insights to facilitate negotiations with vendors, assess the risk of potential suppliers as part of the onboarding process and the ongoing monitoring of supplier risk to prevent supply disruptions or minimize vendor concentration risks. We are working with customers to develop case studies and will share them as they shape up. We find that companies are often shy about sharing details of their risk management efforts, especially larger companies.

Jason: Are you planning additional sources of risk data outside of just credit and news based information (e.g., operational data, regional data, etc.)?

Jim: First of all, we don't classify our data as "credit" at all. Our focus is on compiling as much information as we can about businesses to provide insights that can be used in making decisions about them. Those decisions could be establishing credit lines, monitoring customer risk, determining debt collection strategies, identifying and prioritizing sales opportunities, negotiating with suppliers, monitoring supplier risk, and numerous others. We are a credit bureau, where companies share payment experiences with other companies through our trusted exchange, and we also compile information from thousands of other sources, all with the objective of providing insight into companies for a variety of uses.

We have a thirst to constantly find new sources of data to describe various facets of companies, whether they are someone's customers or suppliers. As part of that ongoing effort, we are working on insights that would be particularly useful for better understanding suppliers, like their customers, products, hiring trends and other aspects along with regional and industry data that could influence them or give new clues into their risk. I also believe that new "social" sources of data will emerge, as they have in the customer risk management space, and we'll be at the forefront of that movement.

There's a ton of data that is untapped (or just lightly tapped) and we're determined to compile it and create valuable new solutions. Stay tuned!

Jason Busch

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