At Commodity EDGE this week, I facilitated two panel discussions exploring the broader commodity management software and intelligence market. As a sector, commodity management technology and data as consumed/used by procurement and supply chain groups is something new. It's also a sector that isn't well defined or segmented, especially on an end-to-end basis. Given this context, knowing where to get started is not the same as areas like purchase-to-pay (P2P) and strategic sourcing/e-sourcing, which by this point, should be old hat for organizations that can easily refer to Spend Matters, Forrester, Gartner or other reports, rankings and shortlists.
Yet segmenting the commodity management software market is not overly challenging. From our vantage point, we see organizations focusing primarily on six key areas of investment in data and solutions. Below, we have provided a short description of each of these areas plus a quick sampling of the providers in each of the segments:
- Price indexes and commodity market intelligence that can feed into a range of systems: spend analysis, contract management, commodity management platforms, ERP/MRP (AP), e-invoicing, etc. (e.g., MetalMiner IndX, Smart Cube, Mintec)
- Broad-based commodity management platforms for hedgeable (and in certain cases, non-hedgeable) commodities that start with up-front spend segmentation by material and value-added components and flow through to contract execution, management, accounting of positions, etc. (e.g., Triple Point Technologies)
- Demand aggregation and visibility to gather multi-tier supplier information on raw material exposure (e.g., Supply Dynamics, Co-eXprise)
- Focused spend analysis (aimed at procurement organizations rather than trading organizations/finance) that can break out material from value-added components (BravoSolution, Spend Radar, Zycus, etc.)
- Sourcing optimization/advanced sourcing technology that encourage supplier flexibility and for exploring different contracting and award scenarios (BravoSolution, CombineNet, Trade Extensions, Emptoris, Iasta, etc.)
- Contract management for creation, managing and insuring compliance against supplier contracts/agreements (Upside, Emptoris, Ariba, etc.)
In this series of posts on commodity management technology and market intelligence, we will follow up on each of these areas in more detail, exploring them individually as well as how they intersect and integrate with each other.