ConnXus’ Multitier Tracking Capability: Creating a Sustainable Picture of Supplier Spend

Editor’s Note: This article is part of our series The Featured Feature, where we explore unique technology capabilities that differentiate procurement software companies. Read our introductory post to learn more.

Supply chain visibility is a major concern for today’s procurement organizations. In a 2017 Geodis survey of 623 companies, respondents named improving supply chain visibility as the third most important priority for their businesses, behind only full deliveries and product availability. Yet only 6% of those respondents said they had full visibility of their supply chains.

Acknowledging this need for better visibility and information about their suppliers, businesses are increasingly turning their attention to the latest generation of supplier management solutions. ConnXus, a more recent entrant to this sector, is one such example, with a particular expertise in supplier diversity tracking and reporting.

Yet labeling ConnXus as “just” a diversity tool would shortchange the broader supplier management capabilities the company has built. As ConnXus’ recent Q2 2018 Supplier Management SolutionMap performance illustrates, the vendor sets the standard not only for what to expect in a modern supplier diversity solution but also what organizations should look for overall when searching for a Nimble supplier management software provider.

Central to ConnXus’ standout performance is its multitier tracking capabilities, for which it scored a “5” in the SolutionMap ranking process. In this installment of The Featured Feature, we take a look at what makes ConnXus’ multitier tracking capability unique, why the feature stands out from other offerings and how the vendor plans to stay ahead of rapidly evolving competitors.

The Feature: ConnXus’ Multitier Tracking Capability 

To understand how ConnXus’s multitier tracking capability stands out, it helps to first define what multitier tracking is within a supplier management solution.

Multitier tracking refers to the ability to view a buying organization’s spend with not only tier 1 (or prime) suppliers but also with tier 2 (or deeper) spend. Depending on the kind of product an organization is using, supplier management solutions can track all kinds of information, including breakdowns of suppliers by direct or indirect spend, supplier diversity qualifications and corporate social responsibility ratings.

In the case of ConnXus, the company’s TierTracker product, which houses its multitier tracking capabilities, captures tier 1 and tier 2 direct and indirect spend for reporting purposes in configurable dashboards. It directly tracks tier 1 spend, as well as provides a capability for tier 1 suppliers to enter their own supplier information to “roll up” lower-tier diversity spending, either directly or indirectly on the organization’s behalf. This allows buying organizations to use their strong relationships with prime suppliers to build better visibility into their tier 2 spend.

This is why, as supply chains are becoming increasingly global and more complex, procurement organizations have begun to invest in multitier tracking as an essential capability.

“Companies have always tracked their spend,” said Daryl Hammett, COO at ConnXus, “but as companies have gone more global, it is important for supply chains to understand where their spend is going and who that spend is impacting.” The aim of TierTracker is to help all organizations “develop a sustainable picture of where you spend.”

When it comes to creating that picture, ConnXus does this better than any other supplier management solution. According to our Provider Scoring Summary for the Q2 2018 Supplier Management SolutionMap, ConnXus delivers best-in-class support for multitier supplier management and capability for data gathering and management requirements. Not only is ConnXus the only provider with a score of “5” — the top score with SolutionMap ratings — for multitier capabilities, it is the only provider with a score above a “3” in this area. This suggests the gap between it and all other ranked supplier management solutions is significant.

Why ConnXus’ Multitier Tracking Stands Out 

Compared with other supplier management solutions, ConnXus’ multitier tracking capability stands out on two fronts: the depth of reporting it provides for all supply chain participants and the complementary services ConnXus provides around its TierTracker product.

While other solutions prioritize reporting up to the buying organization (and, by extension, the software provider), ConnXus deliberately provides the same reporting capabilities and dashboards to prime suppliers that the company itself uses. This increases the reliability and accuracy of the prime supplier’s tier 2 reporting, Hammett said, while also giving the first tier its own version of a supplier management system.

The goal in offering powerful analytics and reporting tools to prime suppliers is to encourage proactive data gathering on the lower suppliers tiers, providing the buying organization with a greater ability to influence more distant suppliers with whom they do not have a direct relationship. Procurement can even set goals for prime suppliers that encourages the first tier to increase the amount of spend reported through the solution.

ConnXus supports this approach through complementary advisory services. The company sits down with all of its new clients to develop a strategic plan for not only how they will begin to analyze their spend but also how they can grow their tracked spend beyond what they initially see. This can also involve ConnXus reaching out to a buying organization’s own prime suppliers on its behalf, coaching both parties through the necessary data gathering exercises and, in some cases, bringing the suppliers onto the ConnXus platform, as well, which enables the solution to dive even deeper into lower supply chain tiers.

“The design of this is to create a holistic approach to supplier management,” said Chris Westendorf, lead account manager at ConnXus. “It’s not just diversity spend but about giving the buyer the full view of the supply chain.”

And it has the numbers to back this up. One major technology hardware supplier that ConnXus works with started its supplier management program with around $50 million of spend tracked. Within a year, that figure had grown $350 million, illustrating the exponential effect a concentrated effort on tracking can have on improving spend visibility.

How ConnXus Wins and Plans to Keep Business 

While ConnXus has seen success in deploying its multitier tracking capabilities at companies large and small, the vendor is not about to rest on its technological laurels. Expanding the reach and applicability of this feature is key part of ConnXus’ roadmap.

One way it plans to do this is to expand on international spend tracking, into more countries and deeper tiers. Along with this broader reach, ConnXus is building a platform where all companies can report their spend into a single portal, with the aim of simplifying reporting to encourage more and more suppliers to share their information.

“We’re trying to innovate the spend reporting process to make it easier,” Hammett said. “If somebody is tired of putting in 25 or 30 reports with 25 to 30 different companies, they may be more likely to fat finger a number — or not report at all.”

And, of course, no discussion of supply chain visibility would be complete these days without mention of the “B” word. ConnXus is indeed looking to introduce blockchain as part of its platform “within the coming months,” Hammett said, at first to support ratings of suppliers and buying organizations.

By maintaining its strong lead with multitier tracking and adding innovative technologies to its core products, ConnXus hopes to not only build on its initial success but also create a broader network to facilitate supplier management success. As procurement organizations become increasingly complex, global and digital, ConnXus is positioning itself as a solution that can address this and other challenges, with multitier tracking as a core piece of its strategy.