The Supply Risk Management Category

Coupa and Hiperos: Supplier Management, Compliance and Risk Landscape Implications [PRO]

This Spend Matters PRO brief explores the competitive implications of the Coupa-Hiperos transaction on the supplier management landscape. The analysis includes summary sector M&A implications and summary landscape/competitive implications. It also explores the potential impact on closer competitors to Hiperos (e.g., Aravo), more distant, network and community oriented peers (e.g., Achilles, Avetta, Browz, etc.); and “sleeping giants” on the periphery of the market such as D&B and Thomson Reuters.

Perhaps most relevant of all, as “compliance as a service” becomes more commonplace as a component of source-to-pay systems in areas ranging from supplier qualification to transactional/invoicing areas, we believe these latter groups may begin to come into contact with Coupa for the first time as the worlds of supplier intelligence and hybrid software, network and compliance collide in a networked manner across various industries.

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]

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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.

Q4 2018 Supplier Relationship Management and Risk (SRM): Provider Scoring Summary

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This SolutionMap scoring summary analyzes a select group of supplier management (SXM) providers. It includes coverage of supplier information management (SIM), supplier master data management (MDM), supplier performance management and broader initiative management (e.g., risk, third-party management) capabilities. It is part of our Q4 2018 SolutionMap report series, also featuring spend analytics, sourcing, contract management, e-procurement and invoice-to-pay providers.

Q4 2018 SolutionMap Sourcing, Spend and Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management and Strategic Procurement Technology Suite Release Notes

This Spend Matters SolutionMap Insider release note provides insight into the Q4 2018 SolutionMap release for Sourcing, Spend and Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management, and Strategic Procurement Technologies Suite SolutionMaps, reviewing the process we follow and highlighting what has changed since the last release.

Within the individual areas covered in this brief, the following providers have been added to the Q4 2018 release:

  • Coupa is now participating in Supplier Relationship Management & Risk and Contract Lifecycle Management
  • SourceMap is participating in Supplier Relationship Management & Risk
  • Wax Digital is participating in Sourcing


Additionally, providers such as AnyData, Determine, Exari, Ivalua, Jaggaer Advantage and Jaggaer Indirect, Keelvar, Scanmarket, Scout RFP and Sievo have received updated scoring following the submission and demonstration of new capabilities based on production releases of individual modules. (Non-GA capabilities are not considered in SolutionMap scoring.) Perhaps most important, over 67 new or refreshed customer references (and over 100+ modular references) were added in the Strategic Procurement Technology areas for Q4.

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.

Enabling Agile Supply Chain Management to Combat Natural Disasters: A Case Study of Biogen and Resilinc

As procurement professionals know, natural disasters are a question of not “if” but “when.” Hurricanes, earthquakes, wildfires or severe weather can quickly hobble even the best-laid supply chain plans, our sister site MetalMiner reports. Just look at the research. According to Resilinc’s Supply Chain Disruption Annual Report, disruptions roughly doubled in 2017, potentially impacting 32% of S&P 500 companies’ supply chains. The supply chain risk monitoring firm’s CEO Bindiya Vakil pointed at that data as an indication that procurement leaders can no longer stay complacent about planning for events like natural disasters.  “This should be a wake-up call for business leaders around the globe,” Vakil said in the report.

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

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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.