The Supplier Risk and Compliance Management Category

Understand the Risk Big Picture — A Webinar Looking at 2019 Risks

supply risk

Spend Matters UK/Europe’s final webinar of 2018 will be held Thursday with an eye toward risks for 2019. The event, “Understand the Risk Big Picture,” also is the final webinar for Peter Smith as the site’s managing director. Folks in North America can join at 8 a.m. Central, which is 2 p.m. in the UK.

It is being run with riskmethods — which provides a cloud-based supply chain risk management platform/solution, and founder Heiko Schwarz will be participating in the webinar with Smith. They’ll focus on different types of risk: cyber, reputational, political, natural and supplier financial risks.

Join them Thursday as they look at what procurement can do to improve risk planning and management. Please register here for the webinar — and even if you can’t make that time, registering will mean you get immediate access after the event to listen at your leisure.

Coupa vs. Hiperos: Supplier Management Head-to-Head Comparison

With news this week that Coupa is buying Hiperos, it’s time for a head-to-head comparison. The providers could not be more different in the pragmatic application of their supplier management technology to solving different procurement challenges. But on paper, both providers offer broad-based supplier management capability. And both deliver functional capability that (usually) meets or exceeds the functional benchmark for each of the areas that make up Spend Matters’ Q4 2018 Supplier Relationship Management and Risk SoultionMap. Join us in this unfiltered SolutionMap results analysis from our Q4 2018 dataset, along with the commentary of the Spend Matters analyst team. These head-to-head columns share the insights of each quarterly SolutionMap report for SolutionMap Insider Subscribers, providing unique comparative cuts of SolutionMap benchmark data along with the trademark quips that Spend Matters was better known for in its early years. So buckle your seat belt, prepare for some real data and expect a few sparks to fly as we pit Coupa and Hiperos against each other in the supplier management evaluation ring to understand where each provider is the most appropriate fit.

Not yet an Insider member? Here’s a preview: In a majority of supplier management categories which include master data management (MDM), supplier information management (SIM), supplier portal, supplier initiative management, technology, configurability and services — Coupa convincingly comes out on top. But Hiperos shines in specific areas that make it an ideal fit to enable specific supplier and third-party compliance and risk management scenarios.

Overall, the results suggest that the right solution will vary based on different organizational requirements. You’ll get no argument from us that supplier management selection processes will reward procurement organizations that tailor provider selection to their specific needs. But despite this (needed) debate, the Spend Matters team sees how combining these two solutions offers the potential for the proverbial — yet often elusive — “1+1 = 3” in M&A by enabling procurement, IT, finance and other teams to work together to manage their collective supply base while reducing overall risk. As we’ve noted before, “Using a holistic approach to managing suppliers and spend can shine a proactive light on vulnerabilities, while reducing risk and protecting brand reputation.”

But how will each product enable this? Let’s dig in and put Coupa and Hiperos supplier management capabilities head-to-head.

Beyond Supplier Risk Management: How Procurement Can Take a Leadership Role in Enterprise Risk Management [PRO]

risk

There is no shortage of news about supply risk in today’s volatile operating market:

 

  • The 12-month LIBOR rate has gone from 2% to over 3% in 2018, and suppliers are beginning to feel a capital squeeze as buyers further stretch their DPO to hoard cash (beyond stock buybacks of course).
  • Brexit continues to loom as a bugbear regarding UK/EU trade. More broadly, geopolitical risk continues to escalate in the Middle East, Eastern Europe, Central America and the South China Sea.
  • S. trade policy still swings wildly at the press of a POTUS tweet, and so do commodity prices and volatility in general. The VIX index has spiked up 65% in the last 60 days alone.
  • Natural disasters driven by climate change are becoming commonplace and calamitous.
  • Competitive risks are sprouting up as digital disruption is creeping into almost every industry sector — and as monopolies “becomes features rather than bugs” with ongoing market consolidation. In response, compliance regimes like GDPR continue to crop up although enforcement is highly variable by region and country.
  • Cyber risk continues to be the most omnipresent risk that organizations are experiencing cross-industry while everyone is flocking to the cloud in record numbers.


So, enterprise risk management should be alive and well. And, logically, supply chain and procurement executives need to be increasingly prepared to work with their internal business partners to reduce this risk and defend the proverbial gates to keep the risks at bay.

Unfortunately, the castle walls are often not well-guarded because the sentries are not getting paid to do so. Procurement organizations in particular suffer from a misalignment between missing incentives for reducing supply risk and zealous Finance-driven incentives for increasing supply reward in the form of narrow purchase cost savings. Regarding the latter, nearly all groups get measured on purchase cost reductions, but only 41% get formal credit for saving money during the sourcing process when there is no initial cost baseline. However, only 8% of procurement organizations get such "hard credit" for reducing supply risk.

Part of the challenge here is that from an enterprise risk management (ERM) standpoint, there is a broader disconnect between evaluating enterprise risk overall versus extending those risk factors in a cohesive manner out to the supply chain and also out to the supply base (via spend categories and then to individual suppliers) where contracts are signed that hopefully help mitigate most supplier risks. There are four “translations” here where alignment gets lost, and to make matters worse, the risk types being managed are highly fragmented, if addressed at all — especially when various stakeholders are in the same boat as procurement regarding not getting credit (and commensurate resources/investment) regarding supply risk. Risk management gets viewed as a glorified insurance policy and set of “check the box” regulatory compliance mandates rather than a sound approach to bringing risk into the value equation (i.e., protecting the value streams of importance through the value chain).

So, the question becomes how can procurement help solve this when so much seems outside its control? And why even pursue it when there are other things to focus on like hitting savings targets?

The answer lies in deftly “connecting the dots” between enterprise risk and supply risk so that various stakeholders like GRC, internal audit, external auditors, divisional presidents, etc. can not only extend their reach into the extended supply chain, but can also be tapped to help bring some corporate power (and resources) to bear and help drive some changes internally and with your suppliers.

In this installment of Spend Matters PRO, we’ll dive into some best practices for gaining this multi-pronged alignment and also how to align supply risk management within various points of the source-to-pay (S2P) process itself. And, of course, if you want to see how various providers handle supply risk, whether S2P suite providers, or more specialized supplier management providers, then definitely check out our SolutionMaps in these respective areas here and here.

Coupa buying Hiperos: Acquisition Facts, Analysis and Insight [PRO]

Just this morning Coupa announced it was acquiring Hiperos as a carve-out transaction from Opus, which previously owned the supplier management, compliance and risk management solution provider. This Spend Matters PRO analysis provides background and quick facts on Hiperos. It also offers analysis and insight on what the transaction brings to Coupa from a capability perspective and attempts to answer the question: Why Hiperos?

Subsequent Spend Matters subscription briefs (PRO and SolutionMap Insider) will provide insight and analysis of the transaction by exploring the competitive implications of the acquisition for the supplier management and compliance market, offering additional customer insight and recommendations and providing a “Head-to-Head” analysis of Coupa and Hiperos from a supplier-management capability perspective.

Read this briefing to find out more about what Coupa is getting and possible reasons behind the Hiperos deal.

Coupa Buying Hiperos — Adding Compliance and Risk Intelligence Prowess to Its Business Spend Management Insight

Business spend management vendor Coupa announced Monday morning that it has acquired Hiperos, a provider of third-party risk management. Coupa bought Hiperos from Opus. Alacra and all other Opus assets were not part of the transaction. The move lets Coupa, which is based in San Mateo, California, add more supplier compliance and risk intelligence insight into spend transactions and put a greater focus on reducing third-party risk. Spend Matters will have updates on the breaking news and an analysis later today.

Focus on Supply Risk Management Can Aid Supplier Relationships, State of Flux Reports

supplier management

Positioning supplier relationship management (SRM) programs as a way to ensure broader supply risk management is an untapped opportunity for businesses looking to address sustainability challenges, according to a recent State of Flux report.

As we’ve reported on the “Sustainable SRM: Nurturing Growth in a New Climate” report from State of Flux, sustainability is becoming a greater consideration when it comes to supplier relationships, due to increasing demand from consumers for ethical products and pressure from governments and investors to consider environmental factors in production. The report highlights a number of challenges facing organizations as they integrate sustainability into their procurement goals, including buy-in up and down the organization, proper segmentation of suppliers and others.

While setting up a proper governance structure, getting buy-in throughout the entire organization and deepening relationships with suppliers takes time, companies can also assess their level of SRM, determine how they manage risk, evaluate their staff’s skills and resources, and ensure their technology is working for them.

Dun & Bradstreet Compliance and Procurement Report Indicates Lower Concern For Regulatory Risks, Growing Confidence in Execution

risk

Fewer compliance and procurement professionals believe that existing regulation has increased the risk to their business and more of them had greater confidence about the implementation of compliance and procurement procedures through year’s end, according a recent Dun & Bradstreet report that updates one released over the summer. Even as the U.S. implemented several new tariffs and the UK continued to grapple with an EU exit strategy, perceived risk fell as the scope and content of the trade-related actions became clearer. That number declined 13 points to 52% for the October 2018 sentiment report.

Study: Conflict gold from Africa may be in U.S. markets, passing through major companies

An October 2018 study released by a watchdog group that focuses on Africa has highlighted concerns that gold mined from conflict areas in the Democratic Republic of Congo (DRC) is making its way into international markets and becoming integrated in the supply chains of major U.S. companies. Documents reviewed and interviews carried out by The Sentry, a team of policy experts and financial auditors co-founded by George Clooney, raise concerns that the corporate network controlled by Belgian tycoon Alain Goetz, director at the Belgian gold refinery Tony Goetz N.V., has refined illegally smuggled conflict gold from eastern DRC at the African Gold Refinery (AGR) in Uganda and subsequently exported it through a series of companies to the U.S. and Europe. The study lists companies like Amazon, General Electric and Sony as possibly being ones that conflict gold may have been sold to.

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

supplier management

The supplier management technology market is among the most fragmented of those in the procurement technology landscape.

It comprises multiple segments (and sub-segments), and Spend Matters now tracks approximately 50 providers that compete within niche segments of it. One of these providers is AdaptOne, a vendor specializing in supplier information management that perfectly matches Spend Matters’ SolutionMap “Turnkey” persona for supplier management. This Spend Matters PRO report provides facts and expert analysis to help procurement organizations make informed decisions about AdaptOne’s solution — and whether its “turnkey” services-driven approach is right for them.

Part 1 of our analysis provided a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider AdaptOne in the procurement, supply chain and finance technology areas. Part 2 covered product strengths and weaknesses. This final installment offers SWOT analysis, explores competitive alternatives to AdaptOne and provides insight into evaluation and selection considerations, including a prioritization/fit checklist.

Sustainable SRM Is Focus of 10th Annual State of Flux Report on Supplier Relationships

gig economy

Many businesses have come around to the idea that sustainability is not just a hashtag or a marketing ploy but something that can help a company advance its business goals. But as organizations dive into all the ways they can save energy and use friendlier materials, they soon realize there are only so many they control. Truly leveraging sustainability requires close collaboration all the way down the supply chain to find mutual incentives for all, according to the latest report by State of Flux, a global procurement and supply chain consultancy.

SirionLabs: What Makes It Great (Contract Lifecycle Management SolutionMap Analysis)

Just when you thought the contract lifecycle management (CLM) software market fit within a neatly defined 2x2 graph, along comes a vendor that breaks the mold, offering top functional capabilities while also redefining exactly what a CLM provider is capable of.

Who is this vendor, you ask?

SirionLabs.

Although it is fully capable of competing in the “traditional” CLM sector, SirionLabs is a powerful, specialized CLM solution that organizations have used primarily to manage and optimize the performance of large, complex, often multi-year services contracts. The solution combines core CLM components with added supplier management capabilities, like  performance management, relationship management and risk management. And it works for contracts of all shapes and sizes, delivering Value Leader (upper right quadrant) performances across every CLM SolutionMap buying persona.

As of Q3 2018, Spend Matters SolutionMap consists of functional and customer satisfaction benchmarks on more than 50 vendors within the procurement, finance and legal software markets. To date, Spend Matters’ analysts have evaluated 13 providers in the contract lifecycle management software segment, including SirionLabs. But where does SirionLabs stand out most, and why should this matter to procurement and legal organizations? Let’s dive into the CLM SolutionMap benchmark to find out.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

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Lessons in Supplier Risk Management: How a Fire, Strike Lost the Auto Industry $500 Million

Nissan

With powerful hurricanes, earthquakes and wildfires threatening business operations and logistics, supply chain risk professionals across manufacturing industries usually have their hands full when it comes to mitigating disruptions. While the focus is usually on extreme weather, two operational disruptions at a supplier level in May and June revealed once again the full diversity of supply chain risks that can impact industrial production lines. In total, both events caused automotive and machinery supply chains more than $500 million in financial losses. These events are stark reminders of how a disruption at a single sub-tier supplier can ripple across manufacturing supply chains, impacting both upstream (sales) and downstream (production) operations.