The Supplier Risk and Compliance Management Category

SolutionMap Subscriptions and Practitioner Selection Programs: A Primer and Sneak Peek at Q1 2018 SolutionMap [PRO]

Earlier today Spend Matters released its Q1 2018 SolutionMap. The release now comprises six technology areas with individual vendor rankings (spend and procurement analytics, sourcing, supplier management, contract lifecycle management, e-procurement and invoice-to-pay) and three composite suite views (strategic procurement technologies, procure-to-pay and source-to-pay).

Our goal with SolutionMap is very different from what other analyst firms seek to achieve with their ranking systems. This is apparent even at our “free” level. The SolutionMap approach starts by releasing the ranking charts in the public domain, providing multiple persona-based views of vendor capability (45 comparative 2/2 matrices in total for the Q1 2018 release). We take a truly data-driven approach to plotting vendors, where an “average” score positions a provider in the dead center of a chart. SolutionMap ranking charts also make it easy to distinguish analyst scoring from customer scoring, plotting the data on separate analyst and customer axes. Finally, the Q1 2018 release actually reflects the time frame of its publication: We update the underlying data set and charts for SolutionMap on a quarterly basis.

Admittedly, the “free” stuff is designed to pique your interest. Unlike some of our peers in the analyst world, we have not made SolutionMap “reprint friendly” for the maximum number of vendors through grade inflation. Why? Because in the world of procurement technology, not everyone is “above average” like the children of Lake Wobegon. There’s an average, and there’s a deviation from average — positive and negative. Obfuscating these deviations might produce charts that make people feel good about buying decisions up front, but other than a near-term CYA, how useful will these be in the long run for those relying on them for, well, anything?

At the new SolutionMap subscriber level — separate from Spend Matters PRO — the tangible value of SolutionMap becomes even clearer. At this level, we unpack the underlying data we show for the analyst scoring by rated sub-category. For example, in the Supplier Management SolutionMap, you can see individual, tiered-based scoring for capabilities such as master data management (MDM), supplier onboarding support, core supplier information management (SIM) and supplier performance management, among other areas. Customer ratings (e.g., level of value perceived, quick deployment, ROI) are also visible.

To see the full level of data available to SolutionMap subscribers, check out the currently available reports from the Q1 2018 release:

There are views of the data beyond those provided in these reports (e.g., tiered-based scoring and ranked scoring for all sub-components that comprise an area, such as master data management within the Supplier Management report). Per our competitive intelligence policy, however, we reserve this view for practitioners going through a selection process (or the consultancies advising them), with strict licensing. This prevents comparative information from falling into the hands of competing vendors participating in SolutionMap. We take intellectual property protection and data privacy, for providers and practitioners, very seriously here at Spend Matters; otherwise, we’d find ourselves out of business quickly.

So, how exactly does all of this work? Read on as we unpack a SolutionMap Insider-level example within Supplier Management from the Q1 2018 SolutionMap. Specifically, we compare Jaggaer with Jaggaer Advantage (formerly BravoSolution) to showcase how it all works.

The Modern Contract: Connected Sets of Data

The purpose of almost every business contract is the same: to define the relationship and allocate risk. To effectively do the latter, supply chain managers must manage external risks and internal risks. But even considered separately, the point is that managing both kinds of risk is challenging. With a plate that full and interdependent, is it any wonder that contracts seem to create more operational friction than they’re worth? Why haven’t we figured out that we can’t adjudicate such variability?

The Smart PE Money Knows When to Pay Up: Avetta Gets New Ownership

To say private equity firms have been ogling over procurement technology and solution firms of late is an understatement. The floodgates have been unleashed. Case in point: PE firm Welsh, Carson, Anderson & Stowe announced earlier Wednesday it will acquire a majority interest in Avetta, a supplier compliance and risk management firm, in a deal that likely broke multiple records (double meaning intended) in the procurement solutions market. (Another firm, TCV, will also acquire a minority stake.) The transaction is significant for the procurement technology space for a number of reasons. But perhaps most interesting, it highlights the differing approaches PE firms are taking to buying, operating and selling solution providers, as well as the kinds of business models that have become attractive (and lucrative) to these firms.

New Report Warns that More Affordable Artificial Intelligence May Be a Blow to Cybersecurity

cybersecurity

Artificial intelligence is becoming more affordable and available to different companies and industries. However, this also means more risks in the realms of digital, physical and political security, warns a new report co-written by a team of 26 AI researchers from prominent American and British universities and think tanks. There are a number of reasons AI can bring about a new level of risk. Most AI researchers believe that AI will exceed human performance in a wide range of tasks within the next 50 years — and if an AI system can lead to better farming practices, it can certainly also conduct more devastating cyberattacks. AI can allow for a greater degree of anonymity and distance for the human actor. And AI systems tend to be efficient and scalable.

Resilinc EventWatch Data: Factory Fires and M&A Activity Rank as Top Disruptive Events

supply risk

Resilinc recently released its 2017 EventWatch Supply Chain Disruption Annual Report, and the top two disruptive event types by a significant margin were factory fires and explosions and mergers and acquisitions. The report is based off the 2017 data collected by Resilinc’s EventWatch software, which monitors and analyzes global events that are potentially disruptive for supply chains and then alerts customers. In 2017, EventWatch published on average five bulletins a day.

Aravo: Vendor Snapshot (Part 3) — Summary and Competitive Analysis [PRO]

suppliers

Of all the procurement solution providers Spend Matters has tracked over the years, Aravo was arguably the most ahead of its time, delivering a set of supplier management capabilities a decade before demand would catch up with supply for this multifaceted solution category.

Owning to the tenacity and passion of its original leadership and the secondary management team that would eventually take the helm, Aravo managed to survive and then thrive, waiting for the market to catch up to it — not the other way around. Today, Aravo excels at many disciplines within supplier management and third-party management, and has a track record of enabling some of the largest deployments of supplier information management (SIM) capabilities that Spend Matters has tracked in the broader market.

This third and final installment of this Spend Matters Vendor Snapshot covering Aravo provides a SWOT analysis of the provider and offers a competitive segmentation analysis and comparison. It also includes recommended shortlist candidates as substitute providers to Aravo and provider selection guidance. Finally, it provides summary analysis and recommendations for companies that can best take advantage of Aravo’s capabilities. Part 1 of this series provided an in-depth look at Aravo as a company and its specific solutions, and Part 2 gave a detailed analysis of solution strengths and weaknesses and a review of the user experience.

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Italy and the Real-Time VAT Control Big Bang

Electronic invoicing is on the decline — and rapidly so. No, I don’t mean companies have started exchanging fewer invoices in electronic format. I mean that the domain that we have in the past 15 years called “e-invoicing” is converging with the broader VAT compliance domain. Together, the two are morphing into what might be called “VAT compliance v2.0.”

Aravo: Vendor Snapshot (Part 2) — Platform Strengths and Weaknesses [PRO]

Aravo was the original standalone supplier information management (SIM) solution in the North American marketplace. Founded in 2000, it is also one of the oldest independent procurement solution providers. After growing beyond its early roots as a catalog management enabler for Ariba implementations, Aravo launched a SIM solution capable of managing general supplier registration field and template-based initiatives. In more recent years, it has evolved into a full-fledged third-party and supplier data management solution that bridges a range of governance, risk and compliance (GRC) and procurement-centric requirements.

This Spend Matters PRO Vendor Snapshot explores Aravo’s strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should consider the provider. Part 1 of our analysis provided a company and detailed solution overview, as well as a recommend fit list of criteria for firms considering Aravo. The third part of this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

What the Super Bowl Can Teach About Risk Management

Pause for a moment to consider how adept the NFL has proven itself at proactively addressing logistics and risk management. Whether we’re talking facilities, security, transportation or emergency services, there’s obviously a lot more behind the curtain than we know about. Suffice it to say that little imagination is required to accept that the NFL sets an interesting, if not teachable, example — not just in terms of how to pull off a mega-event but how to react to most anything that could possibly go wrong. It expects problems and is prepared for them.

Investigative Report Details Toxic Gas Poisoning and Other Serious Labor Violations at Key Apple Supplier

China Labor Watch released a lengthy report Tuesday detailing appalling work conditions at Catcher Technology, a supplier of computers, digital cameras and other products to Apple, Dell, HP, IBM and Sony. The factory under investigation, however, is primarily an Apple supplier, producing iPhone frames and MacBook components. Among many other labor violations, China Labor Watch found toxic gas poisoning, unsanitary food, inadequate protective gear and excessive pollution during its investigation of the Catcher factory in Suqian, China, conducted from October 2017 to January 2018.

The 12 Supply Risk Management Disconnects that Destroy Value (Part 1) [PRO]

risk

“Risk” and “risk management” are terms that are like the ultimate Rorschach test in business: they mean many different things to many people. The same applies to the term “value” — and don’t even bring up “supply management.” Even a specific term like “supply risk” has many interpretations (e.g., it’s much more than supplier risk). The problem with this is that if people within a company define various terms differently, then how well will they be collectively managing those areas? Likely not well at all.

Risk management is a strange animal. On one hand, it focuses on “things gone wrong” and hones in on defining and mitigating various external risks that create adverse events in a value chain. On the other hand, those adverse events affect stakeholder-relevant performance (i.e., measurable value). Such performance and value delivery is focused on “things gone right” and reward rather than risk.

The key, therefore, is to realize that risk and reward are inextricably linked. If ensuring delivered value (and improving it over time) from the supply chain and from suppliers is what supply management is all about, then that supply value should not only be expected (i.e., expected value like discussed above) but also protected (i.e., protected value ensured through supply risk management). As a side note, have you ever considered that the concept of “expected value” uses the term “value” even though it is applied heavily to the world of risk management (i.e., calculating the expected probabilities and impacts of various risks)?

Anyway, the imperative becomes ensuring that the most important performance metrics (i.e., KPIs) are protected from risk. Yet these individual KPIs are rarely individually and systematically managed for risk, and the lack of risk-adjusted performance management means that you’re going to be exposed and it will catch up with you eventually. The problem isn’t just bouncing around and applying risk management technique X via tool Y to address risk type Z. There are a dozen fundamental disconnects in most firms that prevent risk management being properly resourced, aligned, managed and improved. Only by unpacking them and addressing them through focused practical interventions can you really get to the root cause issues that are likely keeping your supply risk management efforts suboptimized.

In this Spend Matter PRO series, we will explore 12 critical supply risk management disconnects. This brief, Part 1, focuses on the following four areas:

  1. Risk Scope and Stakeholders
  2. Performance vs. Risk
  3. Risk Type vs. Impact
  4. Risk vs. Cost (e.g., “cost of risk”)
If you’re a practitioner, you should be able to see which disconnects are the biggest issues for you and make yourself more resilient (i.e., ability to mitigate and recover from risks) and predictably high performing. If you’re a consulting organization, you’ll probably find some pointers to improve any methodologies that you have here. And if you’re solution provider, whether in the supply risk management area, or more broadly, you’ll hopefully get some ideas on how to address more strategic pain points.

LUPR: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses [PRO]

This vendor snapshot series is focused on LUPR, a new entrant in the supplier management technology arena. Pronounced “looper,” but not spelled looper, as that's a media site dedicated to bite-sized entertainment news and pop culture, and procurement technology is usually not that scintillating, the name certainly caught our attention. And maybe yours.

Perhaps you’re chuckling about the various puns on the name LUPR (e.g., that supplier threw me for a …). But once you get past the name — which we believe positively calls out and reinforces the need for closed loop supplier and customer engagement — it becomes clear that LUPR is addressing a number of areas that most procurement organizations have not yet gotten around to automating through technology outside Excel, primarily centered on supplier quality and supplier development in a direct materials context.

Built on the Salesforce platform, LUPR has two different solutions: a buyer platform and a supplier platform, which is free for suppliers to use. This Spend Matters PRO Vendor Snapshot explores LUPR’s strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should consider the provider. Part 1 of our analysis provided a company and detailed solution overview and a recommend fit list of criteria for firms considering LUPR. The third part of this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.