Arachnys – today’s new supplier offers easy access to global supply risk information

Continuing our series this week on innovative new businesses of interest to the procurement audience, today we're featuring Arachnys, which makes me think of spiders (arachnophobia and all that, from the Greek of course) - and the name was chosen in part because there is a "web" element to what they do in more senses than one.

Based in London, the firm was founded by David Buxton, who previously worked as an "investigator" for global risk consultancy Control Risks in Russia and Eurasia - which sounds exciting and probably was! Arachnys has grown to 13 people, not bad in 3 years, and has been angel investor funded up to now. If you look at their people listed on the website, you will see a very high level of academic excellence there – PhD’s in artificial intelligence, prize-winning programmers, Oxbridge, etc. This is a young and very smart firm by the look of it.

The product is an "online platform for carrying out due diligence on 3rd parties" as Buxton puts it. It's a platform that collects, organises and communicates information from a whole host of sources (16,000 worldwide) about businesses, with a particular emphasis on emerging marketsand suppliers. That information comes from official sources such as company registration data or litigation information, the media (international, national and local) and sources such as social media. Much of the information gathering is automated, but Arachnys does have a team of analysts who provide the human input.

In basic terms, the platform provides information about those businesses that Arachnys clients want to know more about, or keep under review in some sense. That might be suppliers, or clients, distributors, agents - their largest customer sector at the moment is banking, where compliance issues mean that banks need to show they have good risk management in place and robust knowledge about their key customers.

So if you want to know whether your Kenyan supplier is involved in any litigation, and who really owns them: or if your Cambodian supplier is being featured negatively in local news media because of labour practices; or whether your procurement manager in Moscow also owns shares in the temporary labour agency that is your main supplier there; then Arachnys may well be able to help you. The system can be set up to focus on chosen key words – indeed, it is important to focus in on key issues and interest, rather than getting thousands of pieces of information. And the user can choose how many firms to apply the search to of course.

From a procurement perspective, it's easy to see the attractions of the platform: it gives easy access to critical information about key suppliers, without you having to do the digging yourself. It could be useful, for instance, in situations where there are concerns about corruption and bribery; or dealing with firms and countries where sanctions might be an issue.

The product is sold on a per seat type licence basis - the nature of it means most organisations only want a few seats, although I could see a large procurement organisation in time wanting it for all their category and supplier managers and equivalent. In time, it's likely that the Arachnys capability will end up being embedded in other systems and platforms, we suspect, and the firm is already talking to providers of wider supplier information or performance management software. Procurement hasn't been their main target up to now, but the product clearly has real application in our sector.

In terms of competitors, Achilles is the 800 pound (380 kilo) gorilla in the supplier information marketplace, but they tend to rely on their own database rather than bringing information in from external sources. SAP Infonet shares certain similarities, but hasn't been promoted in the way we expected 3 years ago when it was launched with apparently much promise. (And you're probably not going to buy Infonet unless you are a major SAP user already, I suspect).

So there is competition, but nothing we've seen that does exactly what Arachnys are offering, and our feeling is that they will continue to do well in coming years. Worth having a look without a doubt if you’re interested in improving your supply chain risk and supplier information management.

 

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