Supplier Risk and Compliance Management Content

How to assess supplier risk management: An overview report and checklist

Procurement professionals must consider many factors when working to protect their organizations from risks — from reputational problems, compliance issues, changing regulations to cyber security and social responsibility. A WBR Insights report built on advice from the consulting firm GEP and the technology provider Global Risk Management Solutions (GRMS) focuses on supplier risk management.

Cyber risks and the future of AI on procurement are highlighted in Dun & Bradstreet Sentiment Report

Concerns about cyber issues and how to get artificial intelligence into procurement have grown, and confidence is fluctuating over the effectiveness of compliance and procurement functions among U.S. and U.K. businesses, according to the annual Dun & Bradstreet Compliance and Procurement Sentiment report. Cyber-risk topped the list of concerns, rising above internal regulatory training and customer and vendor due diligence priorities from the past four quarters. A majority of compliance and procurement professionals now also agree that AI will play a part in enhancing efficiency and generating insights within their business functions.

The 5 Building Blocks of Supplier Management Capabilities [PRO]

supplier management

As an analyst you want to define things, classify them and put them in buckets to be able to analyze and compare them. Often that works fairly well, and we can rate vendors and solutions against each other to find the best fit in any given situation.

But in some areas this is more difficult, mainly because some areas of procurement are less defined from a process perspective. One such area is supplier management, where solutions go under many different names, among them different variations of supplier relationship management (which SAP laid claim to back in the day by naming its entire procurement suite “SRM” to create a nice analog to the “CRM” world), supplier lifecycle management, supply base management or just supplier management. The problem, however, is that both buying organizations and solution vendors often mean very different things by supplier management.  In our view of the market, we simply drop the “lifecycle” part (although we sometimes use “SXM” for shorthand to have the “X” represent everything supplier management related), and simply use the term “supplier management.”

So, in true analyst fashion for Spend Matters PRO, we have defined five supplier management capabilities, or building blocks, to get some structure:

* Supplier Information Management (SIM).
* Supplier Performance Management (SPM).
* Supplier Relationship Management (SRM).
* Supplier Risk Management.
* Supplier Quality Management (SQM).

So now we can classify supplier management solutions by these capabilities. Pretty straight forward, you would think, right? But not so fast.

Customer reviews for HICX are in the new SolutionMap Customer Insights report

This week’s SolutionMap Customer Insights report focuses on customer reviews for HICX, a configurable solution that scored well in master data management and other areas of supplier relationship management.

The applicable SolutionMap category for this report is in SRM & Risk. SolutionMap Insider members can to read about HICX in our latest report.

In each Customer Insights report, we provide a one-page summary of details from the SolutionMap peer review process. It includes ratings on how well the vendor meets its customers' expectations, three key differentiators for the vendor and a list of quotes from customers about the vendor’s greatest strengths.

From Contract Lifecycles to Commercial Value (Part 1): Setting the Table for Digital Transformation (especially for procurement) [PRO]

Are you looking to find that perfect business area for digital transformation this holiday season?

Well, look no further than contract management.

We know what you’re thinking: Improve the efficiency of processing legal documents? That doesn’t sound very festive, or even high impact! However, contract lifecycle management (CLM) itself is being transformed toward a more strategic and business-focused commercial approach that puts revamped contract information (which itself is being transformed to contract intelligence/knowledge through AI) at the commercial core of nearly all business processes. And yes, blockchain is obviously very relevant here too, but that’s a story for another day.

At Spend Matters, we use the term “commercial value management (CVM)” to denote this type of “CLM on steroids.” The word “contracts” (legal documents) is purposefully replaced with the term “commercial” (commerce / business) and “lifecycle” (of the contract) is replaced with “value” to denote the maximization and protection of monetary value embedded within all process lifecycles (e.g., source-to-pay, order-to-cash/configure-price-quote, plan-to-report, forecast-to-fulfill).

So, this area has a little something for all departments across a business to see and manage: spend (procurement), financial assets/liabilities (finance), legal obligations (legal department), service/asset management (IT), revenues (sales/marketing/CEO), risk/compliance (GRC), service-levels (supply chain/ops), vendors/suppliers (procurement, VMOs, etc.), SOW-based services (including contingent workforce), and all-of-the-above (global business services).

Most importantly, it’s an area that you can actually start small and increasingly collaborate cross functionally and generate hard-dollar financial value (although there’s still plenty of organizational land mines here). It’s also an area where artificial intelligence is being developed and implemented aggressively because of the money that is at stake and because of how broken the current processes and systems are.

In this Spend Matters PRO analysis, we will discuss:

* Priorities of more than 450 CPOs where CLM/CVM has direct relevance
* Why CLM/CVM is a critical competency for procurement professionals to master within source-to-pay (S2P) for planning your work strategically, doing better deals, eliminating value leakage, managing suppliers, etc. It also works hand-in-glove with sourcing, category management, and supplier management (relationship management, performance management, risk management, and information management)!
* Why CLM/CVM is also a critical influence tool to better engage stakeholders who are both spend owners and functional partners with a vested interest here. In later posts, we will share some stakeholder/category specific playbooks that you can use.

In subsequent Spend Matters PRO articles, we also will provide a detailed capability maturity model (and supporting digital capabilities/functionality of leading solutions) that practitioners can use to help plan their capability development, and, yes, their digital transformation.

OK, let’s dive in …

Q4 2019 Supplier Relationship Management and Risk (SRM): Provider Scoring Summary

This SolutionMap scoring summary analyzes a select group of supplier management (SXM) providers. It includes coverage of supplier information management (SIM), supplier master data management (MDM), supplier performance management and broader initiative management (e.g., risk, third-party management) capabilities. It is part of our Q4 2019 SolutionMap report series, also featuring spend analytics, sourcing, contract management, e-procurement and invoice-to-pay providers.

Contractor, supplier relationships come with many financial risks, Avetta warns

supply risk

Managing supply chain risk is an important area of focus for companies to consider when working with suppliers and contractors at various levels of business. A recent study from the business-qualifying firm Avetta, “The Importance of Assessing Supplier Financial Stability,” evaluates an array of research on the issues and pinpoints the many risks that companies face when choosing and working with contractors and vendors.

EcoVadis CSR Index sees progress on labor and human rights, but procurement sustainability falls short

sustainable

Sustainable practices are slowly being embraced by companies around the globe, but performance has actually fallen in some key areas, according to EcoVadis’ newly released Global CSR Risk and Performance Index 2019.

The greatest increase was recorded in human rights and labor rights activities where aggregate scores for performance rose from 45.4% in 2017 to 46.7% in 2018, said the report from EcoVadis, a provider of  ratings for CSR, sustainability risk and performance for companies that fuel global supply chains.

EcoVadis attributed much of the gain to increased awareness and scrutiny of modern slavery as well as diversity issues in the workplace, with many governments introducing legislation requiring enhanced due diligence and reporting on these issues

APEX Analytix: What Makes It Great (Supplier Relationship Management and Risk SolutionMap Analysis)

In a market facing increasing consolidation each year, APEX Analytix stands out as a best-of-breed provider that excels in areas where suite providers merely meet the benchmark (or fall below it).

Results from Spend Matters’ SolutionMap vividly illustrate the gaps in the category of Supplier Relationship Management and Risk. While some larger providers post strong scores in general supplier information management, on-boarding or platform-related SXM capabilities (e.g., workflow management), few deliver the same consistently benchmark-topping scores that APEX Analytix does in its specialty areas.

The Greensboro, North Carolina-based provider has long been known for its broader portfolio of recovery audit, overpayment and self-audit software. But where APEX Analytix leads with its specialized supplier management solution — especially with granular supplier information and risk management capabilities — makes clear that specialization can yield considerable functional depth where end-to-end solutions sacrifice in pursuit of breadth.

Where does the provider stand out most, and why should this matter for procurement and finance organizations? Let’s delve into the SolutionMap benchmark to find out where APEX Analytix is great.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark, and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

Customer reviews for APEX Analytix are in the new SolutionMap Customer Insights report

This week’s SolutionMap Customer Insights report focuses on customer reviews for APEX Analytix, which provides software, data and services to manage suppliers, recover overpayments, and prevent fraud and payment errors. The applicable SolutionMap category for this report is Supplier Relationship Management & Risk.

SolutionMap Insider members can read about APEX Analytix in our latest report.

In each Customer Insights report, we provide a one-page summary from the SolutionMap peer review process. It includes ratings on how well the vendor meets user expectations, three key differentiators for the vendor and a list of quotes about the vendor’s greatest strengths.

‘What other needs do you have?’ — Lessons from ConnXus, a supplier relationship expert

Supplier relationship management (SRM) has grown from just sourcing the best deal to really evaluating suppliers for diversity, ability to innovate, value generation and their risk.

In this series on SRM, we’ve discussed how the development of supplier diversity has improved supplier management overall, and we’ve explored how companies can meet their goals to have a robust supply chain that’s diverse.

Businesses now know to get their spend data in order and should know how to measure the impact of that spend. They should be able to develop suppliers and drive innovation. Responsible businesses can protect their brand reputation by assessing their main suppliers (tier 1) and those deeper in the supply chain, as well as having a plan to mitigate risks, like unethical sourcing, forced labor in the supply chain or poor performance in the past. But, it’s also clear that lacking in supplier diversity or being weak in supplier information management (SIM) are risks themselves.

To learn more about these issues, we talked with SRM expert Daryl Hammett, the general manager of ConnXus, a provider that connects buyers and qualified suppliers.

Q3 2019 Supplier Relationship Management and Risk (SRM): Provider Scoring Summary

This SolutionMap scoring summary analyzes a select group of supplier management (SXM) providers. It includes coverage of supplier information management (SIM), supplier master data management (MDM), supplier performance management and broader initiative management (e.g., risk, third-party management) capabilities. It is part of our Q3 2019 SolutionMap report series, also featuring spend analytics, sourcing, contract management, e-procurement and invoice-to-pay providers.