Segmenting the Supply Chain Risk Management Market — Vendor Categories/Types (Part 3)

In the first two posts in this series (Part 1 and Part 2), we examined two types of providers within the supply chain risk management provider market: platform vendors and best-of-breed/pure-play providers. In this final post, we'll conclude by examining characteristics of niche supply chain risk management providers, many of which tend to focus on content and web-based information services and aggregation that can provide supplier intelligence to companies in targeted areas. It's important to note that some vendors in this area (like VendorMate, which is focused primarily on managing vendor compliance down to the employee level in clinical healthcare settings -- hospitals, IDNs, etc.), often target a single industry or a single business process. In this regard, there are dozens of small providers we have not reviewed as part of our research in the past twelve months that may very well be invaluable for delivering supply chain risk insight for specific industries and areas.

Niche providers tend to focus primarily on one of two areas: automating the collection, management and analysis of compliance related information (e.g., certifications) and aggregating (or originating) and analyzing third-party data to help companies make better sourcing, supplier management, competitive intelligence and related decisions. Others may focus on enabling a single aspect of supply chain risk management (e.g., supplier performance management). Some of the vendors for consideration in the niche category -- many of which are not competitors in the least -- include Biznet, Browz, Exigis, Panjiva, Vendormate, SAS and Zepol. Among these niche content and software providers, revenue models vary substantially and may include both buyer and supplier-funded -- or even hybrid -- approaches.

A vertical focus still appears to be the norm for many of these vendors. For example, SAS has specialized in manufacturing risk/performance analytics in the past while Vendormate has opted to pursue the healthcare and financial services verticals. Biznet, as a leader in the supplier performance management market, has solid traction in oil and gas (and limited penetration in other verticals). In many cases, a vertical focus can help these providers tailor their solutions and deployment approaches within a particular industry to enable specific and often unique requirements and business processes. When it comes to functional focus, niche provider approaches range from focusing entirely on managing external information (e.g., Panjiva) with limited or no ties to internal process, information and workflow to a hybrid internal/external focus.

Spend Matters actively encourages procurement and supply chain organizations to consider niche supply chain risk management providers alongside both platform and best-of-breed providers in the area. In certain cases, a company may opt to have two or more solutions (even within the niche area) to serve specific supply risk and supplier management needs.

Jason Busch