RollStream: Winning Supplier Information Management Deals By Selling Something Else (Part 2)

In the first post in this series, I provided some context on how RollStream is breaking out of the supplier information management (or supplier/enterprise community management, as they describe it) mold and building customer traction by targeting supplier compliance as the burning platform in which to convince potential customers to invest in this emerging area. I believe this is not a minor go-to-market adjustment as many might dismiss it as, but rather a signal to how organizations can build enthusiasm for investment in what is a key and yet almost always overlooked area. In our recent discussion, Nick Parnaby, RollStream's Founder, suggested that it's primarily the "B2B IT guys" who are driving the decision process. In other words, the interest nexus is where "IT meets purchasing," as he describes it.

Perhaps this explains why RollStream realizes decent success through its partnership with legacy EDI vendor GXS, which is positioning RollStream as a means of driving collaboration and community on top of data exchange. Yet RollStream and other competitive solutions like it, do more than just provide collaboration and community (to me the "social" side of RollStream's community and collaboration approach and positioning is really just clever positioning -- at its core it is a full-featured supplier information management toolset). They provide a means to ensure, in the case of consumer packaged goods or over the counter pharmaceuticals for example, that the caps or plastic casings that surround an item meant for consumption meets all of the safety requirements necessary to sell in a particular market. There is slight overlap with product information management (PIM) or master data management (MDM) products here, but because RollStream and its competitors are not yet tracking information at the item or part level, the approach is focused on safety, process, CSR and other certifications at the supplier, site or facility level.

Still, the level of detail and visibility that RollStream can get you to, provided you have the means to assess or obtain the information in the first place, is impressive. And it can begin with a dashboard that measures where suppliers are on a relative basis. Take compliance, for example. A simple view can enable a user to drill down not only on how vendors have performed in the past, but on the specifics about which suppliers, and what percentage, are in remediation, what number have completed and sufficiently updated profiles for the given quarter or year and the status of upcoming audits. In addition, users can define the system to provide a higher-level view of auditing trends and other activity in addition to showing supplier-level compliance and related information with a few simple clicks.

RollStream has built their approach for a many-to-many type of solution that could, in theory, support the type of consortia supplier management model that has made Achilles so successful in specific vertical markets (e.g., oil and gas) from a vendor management and auditing perspective. But so far, customers have deployed it on a one-to-many basis, preferring to invite their own suppliers and gather their own information into the process. Still, the potential for RollStream to deploy a truly networked approach -- which other providers in the space also have ambitions towards -- would only be a simple business model adjustment rather than a technical one. For example, this approach could easily create a leveraged market clearing house for the collection and management of conformity certifications to show that suppliers are conforming with the Consumer Products Safety Act of 2008 (CIPSA).

Even though compliance to CIPSA and other related issues are helping RollStream get its foot in the door, another piece of the supplier management puzzle keeping them under safe customer cover and building interest in the solution is issue or case management tools. Some customers are deploying these solutions to control and monitor the overage of payments to suppliers -- in a similar but less advanced way, compared with what Lavante and the audit recovery services providers do -- while others are using more to launch corrective action responses to non-compliance or other manners more core to the reason the "B2B guys" are purchasing the tool in the first place. Under this scenario, users can use RollStream, as they can other supplier management tools, to perform root cause analysis and monitor proposed supplier approaches to remediation. Nick puts it succinctly when he notes that what is of interest here is the "going after the resolution of risk versus just the reporting of it."

At the end of the Spend Management day, I believe that RollStream's traction relative to other vendors in the same space owes more to the creative positioning of a broad platform for specific issues than anything else. The solution, while solid and with some novel bells and whistles, is not terribly more or less advanced than other top best of breed providers (though it is definitely in the top tier from a feature/function perspective). Long-term, the capabilities of the underlying platform will no doubt serve RollStream well, but as long as supplier management (including compliance, performance, risk, diversity, CSR, etc.) remains a part-time focus for most procurement organizations and a second priority relative to P2P and related spend/sourcing/contracting initiatives, I suspect they'll continue to build traction focusing on small, pet concerns and issues. This is a shame, because what RollStream is capable of doing is so much larger than just addressing the highly targeted compliance needs of certain stakeholders. If you're looking for more information on supplier management, see our latest Compass Series report here. Jason Busch

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