Updated — CORONAVIRUS RESPONSE: Consider These Procurement Technology Solutions to Get You Through the COVID-19 Pandemic (Introduction)

risk management

UPDATED Sunday, March 22: Spend Matters analysts have updated this PRO Coronavirus Response piece to include two additional categories and related providers, in addition to our five original categories. All of our recommended vendors are now listed in each category. Last week, this post was unlocked from behind the paywall so all Spend Matters readers could see the types of procurement technology solutions that can be helpful for businesses during the COVID-19 crisis. These solutions can only do so much, but we’re seeing some creative uses for their tools. And the providers are also responding with specialized programs and free/freemium offers to help out.

If you are a practitioner, consulting firm or a provider that has found novel ways to help cope with the disruption from the coronavirus pandemic, we’d very much like to hear from you and share your lessons and capabilities. We’ll also update our coronavirus resource page, which lists all of our COVID-19 coverage.

As this series continues, individual vendor profiles will be included in category-specific briefs for PRO subscribers — but, as always, the excerpts on the PRO briefs will be updated with helpful information that is free for all readers.

The genesis of this series is that the Spend Matters analyst team got together virtually in an emergency brainstorming session about the coronavirus outbreak. The purpose was to review our existing research and identify the most critical groups of procurement solution types and example providers that could be potentially useful to procurement organizations managing through the COVID-19 pandemic. We decided during this session to publish a comprehensive series to inform our subscribers.

As such, this PRO series will initially explore seven types of providers. And it will detail multiple providers in each category*, including how each specifically can address COVID-19 procurement challenges. We will add to this list as more practitioners, consulting firms and solution providers come forward to share their learnings and their relevant capabilities. If you are a member of one of these groups, and you are addressing the pandemic in a way that others can learn from that you can share, please contact us here and let us know more!

These are the seven categories of providers that we will profile in this series:

1. Supply risk management (e.g., riskmethods, resilinc, EcoVadis, Resilience360, RapidRatings, etc.) Read this category’s PRO analysis and solution recommendations here.

2. Sourcing and commodity management, including advanced sourcing, direct sourcing and commodity management to help dynamically plan and source (e.g., Allocation Network, Jaggaer, Synertrade, Ivalua, Tealbook, etc.) This category was updated April 23 and is discussed in-depth here.

3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes (e.g., Sievo, LevaData, Suplari, and others). Its profile for this series was updated April 22 and is available here.

4. P2P that emphasizes working capital, dynamic discounting, payment control and related finance priorities (e.g., Basware, Coupa, Tradeshift, Taulia, etc.) to help inject cash into the P2P process — especially for harder-hit suppliers who are more than happy to trade discounts for mission-critical cash. (See details about this category here. It was updated April 24.)

5. Fraud, P2P and vendor management safeguards (e.g., APEX Analytix, AppZen, ConnXus and others) when new suppliers need to be set up quickly, and also when lowlife fraudsters try to use the pandemic as a way to steal money and IP. (Its profile for this series is here.)

6. Providers with deep contract analytics that can analyze a contract portfolio for affected contracts from affected suppliers (and customers) for not just force majeure clauses, but other related clauses that tie to the multiple risks popping up at once in the pandemic. Sample providers include specialists such as Seal Software (now DocuSign), Conga (which acquired Counselytics), LegalSifter, and Kira Systems — as well as AI-capable CLM providers such as Icertis, Agiloft, SirionLabs, Exari (now part of Coupa), and a few others.

7. Contingent workforce and services solutions that are able to, at a minimum, help rapidly ramp up on-demand workers to deal with massive resource shortfalls caused by the pandemic — especially within healthcare (e.g., see this Reuters article calling out staffing agencies that are paying $3,000-4,000 per week for fill-in travel nurses). We are looking at four categories of solutions: for sourcing remote/online work; solutions for sourcing and managing mobile-first contract workers anywhere you need them; solutions to “direct source” and manage contract workers; and solutions for data management and analytics. Some existing providers that we cover include Upwork, Shiftgig, Field Nation, Fiverr, Shortlist and others. But we expect many more use cases and providers to emerge given that the pandemic inherently affects people way more than it impacts widgets (other than critical medical supplies/equipment).

We can’t profile every provider in this quick-hit series, especially those that have not gone through a formal briefing, demonstration and fact-check process. And we’ll almost certainly be adding more providers and use cases as the situation unfolds. For example, supply chain planning and execution systems are getting tested right now as dynamic re-planning needs to occur (e.g., how to reschedule truck loads when drivers call in sick or have nowhere to rest/eat when the truck stops are closed).

Please note, this series will not duplicate past coverage. It is meant to build on existing research and share, specifically, how solutions can address the challenges caused by the COVID-19 pandemic (and those challenges that will emerge during it). Our approach is one of not just about throwing tech at the problem, but more of “the art of the possible” and tapping supply markets for innovation and capabilities (which is what procurement is increasingly tapped for itself). And we also want to state emphatically that this isn’t an opportunistic effort to capitalize on mass death. It’s a critical time for empathy, leadership and goodwill to try to help each other however we can.

Finally, our guidance does not focus on technologies to support “the basics,” such as listening to your major customers who are sending you guidance on risk mitigation (for example, a major retailer is advising suppliers to turn up the heat in warehouses, if possible, to reduce the likelihood of transmission). Nor other foundational work streams such as doubling down on janitorial support to disinfect surfaces, checking in with critical suppliers and getting feedback, evaluating the most critical contracts to get out of (and/or amend), understanding if you can get additional allocation if needed (with your hard-earned “customer of choice” status, right?), adjusting savings targets, reducing budgets (generally), etc. Some of this can seem like “supply risk motherhood and apple pie.” But, to borrow another cliche, you still need to “Just do it”!

Yet, some opportunities are not as obvious. So, in this PRO series of research briefs, we will focus on sharing specific use cases and example vendors that can make the difference beyond the basics, and put you, ideally, in a better situation than your peers — rather than simply treading water (or worse).

In this first installment, we will begin by framing each area in terms of the specific business issues that targeted technologies solutions can address. We’ll also give a preview of some providers in each area (i.e., vendors we will explore in greater detail in our category-specific drill-downs that we’ll be publishing soon within these “early” weeks of the global COVID-19 pandemic). Let’s begin.

* We’ll start the series with providers that have briefed Spend Matters about their solution, including going through detailed product demonstrations and research fact-checks in the past (resulting in PRO coverage and, if applicable, SolutionMap ratings). We may opt to add additional providers beyond these depending on the length of the crisis. Please note, owing to the fluidity of the situation and “need for speed” we may not provide fact-checks to the vendors mentioned if time does not permit, as we are basing our write-ups on our working knowledge of the solutions already, as demonstrated and validated previously.

Theme 1: Supply Risk Management

Specialized supply risk management solutions such as riskmethods, resilinc, Resilience360, EcoVadis/CyberVadis, Rapid Ratings (which we will profile in this series based on how they can help tackle COVID-19) are ready-made for a crisis such as the current pandemic. While each technology provider listed above is different — e.g., tracking product flows through a supply chain of affected nodes versus monitoring the financial impact on critical suppliers (including private ones) — they can help to answer a range of questions such as:

  • What countries does my company do business in with suppliers at the tier one level? Tier two? Tier three? Etc.
  • Which suppliers are affected by COVID-19, and what should I do about it?
  • Will they be financially threatened because of COVID-19?
  • Do I have supply risks in critical categories because of COVID-19?
  • Is there anything I can do if suppliers are individually high risk?
  • How do I focus attention on the items where commodity pricing (and potential lead times) are affected?
  • What transportation lanes are impacted? Where is my cargo/containers today? Can delays or other risk factors be expected further down the inbound supply chain before it reaches my facilities? For example, West Coast ports are dying for container ship capacity because so many ships are idled in China in quarantine conditions.
  • Which of my affected suppliers are potentially unsustainable in their practices (which could be leading indicators of other risk factors)?
  • Are bad actors using the crisis to penetrate corporate systems with phishing scams aimed at vulnerable suppliers logging in to procurement systems?

Theme 2: Sourcing and Commodity Management (Advanced Sourcing, Direct Sourcing/Commodity Management, etc.)

When the supply chain and suppliers are impacted by the coronavirus pandemic, the impact assessments and mitigations need go beyond just knowing what nodes in the network are affected, but also then the ability to find alternate suppliers and dynamically re-source. This includes functionality for supplier discovery (e.g., Tealbook) and direct materials sourcing that includes bill of material management capability (that enables part-level visibility), supplier management, event/bidding management, quality/first article testing and related capabilities. It is critical to rapidly qualify new supply chains — even with existing suppliers. Providers that pique our interest here the most include Allocation Network, Coupa, Jaggaer and Synertrade.

In addition, advanced sourcing technologies can help set up an ideal supply chain based on new constraints that may be introduced given COVID-19 (e.g., avoiding suppliers in certain countries for a specific period of time, going producer/mill direct for ingredients, finished, semi-finished and raw materials to reduce supply chain risk in directed buy programs for tier one suppliers, working with third-party logistics firms (that will take liabilities) vs. individual transportation providers to reduce risk, etc. Coupa is, without question, the best-in-class sourcing optimization provider (based on technology acquired from Trade Extensions), but Jaggaer (enhanced by technology acquired from Pool4Tool) offers compelling capability as well, among others.

While each technology provider listed above is different, they can help to answer a range of questions.

These include:

  • How do I identify all related products that need to be resourced?
  • How do I find new suppliers if needed?
  • How do I identify and rapidly qualify new suppliers as needed (based on specific category and/or manufacturing requirements)
  • How do I involve all the stakeholders to get rapid project approval?
  • How do I quickly start new projects, get bids, cut contracts and lock up available supply?
  • How do I identify everything I need to keep a production line up and running for a key product? (BoM)
  • How do I address and manage quality (both first article testing and continuous)?
  • How do I best engage and develop at-risk and/or strategic suppliers that are critical for business continuity?
  • How do I best split demand across multiple supply options to maximize supply assurance?
  • How do I make optimal award decisions based on flexible (and changing) business constraints?

Theme 3: Advanced Procurement Analytics (commodity management, supply/demand planning, etc.)

When running impact analyses to plan for mitigations during the pandemic, you need to have a view of your spend as it relates to contracted spend (and related contracts — which we’ll cover later), budgets, planned spend, and upstream supply requirements pegged to that spend and to supply/commodity markets). This theme focuses on spend, procurement and supply chain analytics that goes beyond the basics, such as standard descriptive out-of-the-box category spend reports, supplier spend reports, top n reports (for categories, suppliers, geographies, departments, etc.), basic trend analysis, standard diagnostic scorecards and basic trend reports.

In response to COVID-19 (both during the acute and recovery phases), advanced analytics may help make the difference between success and failure. Advanced analytics can be broken up into different categories but may provide:

  • True predictive insight into future cost and performance based on current (and not just historical) trends
  • New opportunities based on (near) real-time data using machine learning/AI-based insights
  • Deep insight into community and market costs and availability using (anonymized) community intelligence
  • Prescriptive guidance based on best-practices for the situation at hand
  • Built-in support for global direct materials analytics including commodity analytics, foreign exchange considerations, etc.

In addition, advanced analytics solutions can provide what-if analysis based on expected scenarios, identify additional (but unknown-to-the-organization) sources of supply within the supply base (based on relationships across divisions and geographies and off-contract spending), identify additional products that belong to at-risk categories to make sure they are (re-)sourced before unavailability of supply arises, and identify products that can be instantly, and even, automatically sourced without detailed price analysis (as market pricing has not yet been affected), allowing the sourcing team to focus on the most critical categories.

Vendors that grab our attention here are LevaData (which can do automatic category analysis and even sourcing in the electronics supply chain), Sievo (which is one of the last best-of-breed procurement analytics vendors that hasn’t been acquired and which has very deep community insight into direct products and categories), and Suplari (with new AI technology that can bubble up insights that not only identify opportunities to save today, but, with the right tweaks, opportunities to prevent losses tomorrow). “Playbooks” aren’t just for supply chain risk tools, but also for category/sourcing playbooks and for contracts that should specify how such mitigations and potential disputes will be addressed (we’ll tackle this later).

While each technology provider listed above is different, they can help answer a range of questions that include:

  • How much am I paying now for a product, and how much should I pay based on today’s commodity pricing and currency volatility (if I can lock in new sources of supply quickly)?
  • How does a significant drop in supply availability (due to factory shutdowns, border closings, etc.) affect pricing and supply assurance?
  • Inversely, how does a significant drop in (consumer/business) demand drive sourcing decisions upstream with dependent suppliers?
  • How do I translate volume requirements down to tier n suppliers? (As the risk of supply assurance might be many levels down)
  • What is the organization’s liability if it cannot meet upstream demands, and how does it best distribute limited supply during hard times?
  • How do I translate abundance of supply (due to drop in demand) up through customer channels, especially if it’s sitting in the warehouse?
  • How do I identify the future impact of forthcoming supply chain shortages (a part requires a raw material, but it’s two tiers down the chain, and the need for that raw material is hidden)?
  • How do I detect unexpected early, or late, price swings? (The corporate toilet paper!)
  • How do I evaluate and compare the cost of multiple assurance or risk mitigation options in front of me?
  • How do I evaluate individual supplier risk with data coming from multiple sources?
  • How do I understand the cost impact of supplier failure?
  • How do I understand the cost impact of raw material availability?
  • How do I prioritize categories to tackle first?
  • How do I identify outliers that might signify future issues or opportunities?

Theme 4: Financing/P2P/Working Capital/Payments

The worlds of intersecting procurement-led and finance-led procure-to-pay (P2P) initiatives — as opposed to separate programs — are increasingly converging. When procurement and finance come together in support of transactional procurement and accounts payable, it makes it possible to create and scale working capital, financing and payment programs that bring the potential to create more resilience within both the organization and supply chain.

Providers that can enable this type of capability include Basware, Coupa, Taulia and Tradeshift. While each of these technology providers is different, they can help answer a range of questions that include:

  • How do we preserve cash?
  • How do we deploy cash?
  • How do we reduce risk while deploying cash?
  • How do we raise cash to support the spike in working capital demand based on customer demand (e.g., Walmart, Amazon or other large retailers)?

Theme 5: Fraud, P2P and Vendor Management Safeguards — bad times bring out the best … and worst in everyone — so be prepared

Crises are notorious for two things — bringing out the best in people and bringing out the worst in people. This is where you find out who the true heroes are in your organization and the true villains who might try to take advantage of your hardship (and the hardship of humanity in general).

This is also where a fraudster in the supply base — acting alone or conspiring with your organization — might pull out all the stops to get a fake invoice in the door, or at least fake payment instructions. This is where they will not only employ a full range of cyberattack technology, but take their research and social engineering to the next level.

So, even though you might think that critical supply assurance (at any reasonable cost) and employee protection (when travelling) are “job one” in the current environment — and you would be right — you can’t ignore fraud. Indeed, even while re-sourcing, cost control (where demand is dropping), emerging risk management, supplier sustainability (where critical) and early payment and financing options — topics we already covered — are critical, they do not account for the nefarious element of humanity.

That’s why we feel that providers such as AppZen, APEX Analytix and ConnXus will be critical to include in your supply chain management and crisis response planning to make sure the suppliers you select are real, the payments you are sending are going where they are intended, and you are getting what you are paying for (and not paying for it twice).

While each technology provider listed above is different, they can help answer a range of questions that include:

  • Is the supplier a valid entity? And one that you can safely do business with?
  • Is the individual representing the supplier or entity they are claiming to?
  • Is the email or the obviously incomplete invoice / order acknowledgement you received a phishing scam?
  • Is the supplier trying to take advantage of the circumstance and price gouge? And, if so, are they violating a contract?
  • How do I protect AP/GL when setting up new suppliers quickly and cutting checks / doing ACHs/wire for emergency funding?
  • Is the invoice completely legit? (Fraudsters will try to intercept valid invoices, alter banking / payment info, and resubmit with “correction.”)
  • How do well-intentioned employees trying to supply their offices (or non well-intentioned employees trying to stock their homes) buying non-approved items affect cash flow and organizational finances?
  • Should you limit to approved catalogs or buying portals (such as Amazon Business).

Theme 6: Contract Analytics to identify and mitigate commercial risk/impact

Providers with deep Contract Analytics have the ability to analyze a contract portfolio for affected contracts from affected suppliers (and customers) not only related to force majeure clauses, but other related clauses that may need review and renegotiations:

  • Pandemic clauses that may be formally included/excluded with force majeure or otherwise — and knowing what clauses supercede others
  • Timelines, process steps and required obligations when filing for contract relief (or expansion)
  • Jurisdictions and governing law (which may impact force majeure)
  • Liquidated damages
  • Termination clauses
  • Financial/physical minimums and maximums
  • Performance clauses / SLAs (that may be severely impacted)
  • Payment terms
  • Assignment clauses
  • Dispute resolution / arbitration
  • And so many more!

The providers should be able to analyze contracts and related broader commercial information (which we call commercial value management), and allow firms to:

  • Interrogate the contract portfolio proactively based advanced search down below the clause level to specific obligations and risks
  • Relate contracts to other critical data about counterparties (suppliers, customer, etc.) and value chains to help prioritize where to focus
  • Get ahead of contracts that will do you harm in terms of performance obligations and renewals (and related steps)
  • Respond to specific adverse contract events that are occurring real time
  • Perform where-used analysis and “related contracts” pegging to find impacts and enable changes (some of them being mass changes)
  • Prioritize work queues and leverage third-party service providers in order to quickly react and mitigate while also trying to perform other “normal” work that needs to get done
  • Renegotiate and amend your agreements to help you weather the storm

Sample providers include specialists such as Seal Software (now DocuSign), Conga (which acquired Counselytics), LegalSifter and Kira Systems — as well as AI-capable CLM providers such as Icertis, Agiloft, SirionLabs, Exari (now part of Coupa), and a few others.

Theme 7: Contingent Workforce and Services solutions can help source and manage impacted workforces during the pandemic

The current coronavirus pandemic is very much a people problem that impacts organizations managing not just their payrolled workforce, but also their contingent workforce. Contingent Workforce and Services providers that are able to, at a minimum, help rapidly ramp up on-demand workers to deal with massive resource shortfalls caused by the pandemic — especially within healthcare settings (or other critical workforce settings) and also the new digital environments getting built up (and strained!).

In our coverage here, we are looking at four categories of solutions related to managing remote/online work; solutions with geo-specific capabilities; direct sourcing; and data management. Some existing providers that we cover include Fiverr, Upwork, Field Nation and others. But we expect many more use cases and providers to emerge given that the pandemic inherently affects people way more than it impacts widgets (other than critical medical supplies/equipment).

By using these types of solutions, companies can better answer the following questions and respond based on the answers:

  • If employees become ill, quarantined or stranded abroad, how do you temporarily replace them safely? (How do you source independent talent? Upwork? Fiverr?)
  • How can you quickly staff-up fast as different local markets pick up? Should you geo-fence replaced talent to minimize risk? (Use Field Nation or Shiftgig?)
  • If you hire independent contractors, how do you verify their work? (time-cards and validated invoice submission through Shortlist or Talon?)

Stay tuned as our Coronavirus Response coverage of specific providers continues and as we roll out category-specific coverage of these areas and the supporting providers. If we’ve missed any critical areas to cover, please do contact us and let us know to improve our coverage and value to you, our readers.

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