D&B Morphs and Grows Its Overall Supply Management and Risk Strategy (Part 1)

In March, I had the chance to catch up with D&B's Jim Lawton (who runs the venerable content provider's supply management business unit) about how the company's strategy and products have evolved since its acquisition of Open Ratings in 2006. Jim came over as a part of this acquisition and since that time, has observed firsthand how that deal's timing was absolutely impeccable for D&B. After all, the demand for supply risk content and tools in the market has grown at a significant clip since then. I probably have enough material on the history of this deal from my past dealings with Open Ratings and their customers -- not to mention analyzing and covering the supply risk market for nearly a decade -- to write a book about how D&B transformed itself from the outside-in with this deal, and their subsequent product strategy enhancements and refinement.

For now, I'll save the history lesson for another time and focus on the core components of what D&B's recent moves have meant, and will mean, for the supply risk management market. This first post in this series, however, provides context that will hopefully set the stage for both customers considering D&B, as well as other content providers and vendors seeking to evaluate D&B and its competitors as content partners.

At the time of the Open Ratings acquisition in 2006, D&B had, in Jim's words, "too many products on too many platforms with too many underlying technologies." From a content thoroughness and accuracy perspective, the result was that depending on which products a company chose to license or interact with, they may have just received different views of the same time. Moreover, D&B had a wandering focus at the time, concentrating significant energy on selling content and tools in the spend analytics space rather than focusing on supply risk and supplier management as their core objective. D&B placed quite a bit of emphasis on selling content directly rather than going through channels -- which in the past few years has become a major component of its approach to selling supplier-focused content. In D&B's words, this has allowed vendors "that are delivering solutions to make sure they have the best data," while also allowing them to OEM D&B data directly into their solutions. This changed market was the first major evolution of D&B's strategy in this area.

In addition to this turning point in channel vs. direct content sales strategies, the second major evolution was to leverage Open Ratings technology as a core platform, rather than what D&B had previously developed on its own. Starting in 2007, D&B began to migrate its existing products onto the Open Ratings platform. D&B now has ten times the number of customers using the platform as Open Ratings had at the time of its sale (at that point, there was material concentration in the industrial manufacturing area, but as supply risk has become a major concern across industries, the growth has been less concentrated on any one sector). The latest stats I received from D&B on platform usage show that 15 of the top 25 Fortune 500 companies are currently using its SMS technology in the risk management arena, and 15% of the Fortune 100 companies is on it as well. In total, these companies are monitoring some 330,000 suppliers.

As customer acquisition and usage has scaled, D&B has continued to invest materially in building out the solution's overall capabilities into a broader toolset. This isn't just to predict supplier bankruptcies or monitor and manage the supplier engagement lifecycle; it starts with on boarding and progresses through supplier development. D&B made a significant investment in the new platform technology, including a re-architecting that allowed greater configuration flexibility and the ability to examine more types of data. It's also allowed the ability, like other Spend Management sourcing and P2P solutions, to deliver customized branding -- so a company can have its own certification and management programs, thereby leveraging brand identity.

The current platform for sale today, D&B Supplier Risk Manager, represents the next generation of the Open Ratings platform, a development and re-architecting effort that takes their previous supplier risk management efforts to the next level. The D&B Supplier Risk Manager platform enhances the Open Ratings platform with additional D&B-focused predictive content, expanded functionality and functional enhancement to the their Supplier Certification Portal. Most recently, D&B has also built new capabilities into the platform that offers a scalable set of modules that customers can use and build upon direct and even multitier supplier management needs expand.

In D&B's words, Supplier Risk Manager "combines financial and operational data on private and public companies with predictive technology to help companies see supplier instability and take action before it can cause a problem." It went live in the first release in Q3 of 2009. The second release occurred in Q4, and yet there are still some legacy clients on previous versions. D&B expects to migrate a majority of its customers onto the new platform in 2010.

Stay tuned for additional coverage and analysis of what's included with D&B Supplier Risk Manager and how it stacks up in the market.

- Jason Busch

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