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Making Sense of Supply Risk Management Solutions (Part 4) — Supplier Financial Risk Monitoring Services [PRO]

In previous installments of this Spend Matters PRO series, we outlined the overall segments of the supply risk management market and then began diving into the supply chain risk management segment and the overall supplier risk management area with a focus on risk management within a supplier management context that sits within the broader area source-to-pay (S2P).

For most procurement leaders though, supplier risk management can be a daunting problem to tackle if looked at truly holistically and strategically — especially when those leaders are not always measured on supply risk. In fact, in a research study that we did a few years ago with over 200 procurement professionals, we found that 53% of them weren’t even measured explicitly on reducing supply risk.

That said, no CPO wants to be caught out if a critical supplier goes bankrupt, and this is why a higher percentage of firms will perform a subset of supplier risk — supplier financial risk monitoring for critical suppliers. In fact, CAPS Research came out with a metric in April citing that 72% of surveyed firms (which tend to be large enterprises) are currently using third-party tools to monitor the financial health of their suppliers. The knowledge of which suppliers are struggling also helps illuminate other supplier performance areas that are likely being impacted: innovation, risk reduction, etc. It’s not just a supplier “death watch.”

These tools (which are really more data services than tools) are the ones that we’ll now delve into. And the timing couldn’t be more critical given what’s happening with the COVID-19 pandemic and the impact that it’s having on so many suppliers right now — especially smaller / private suppliers that don’t have strong capital reserves to weather the prolonged crisis that looks to be hanging around for at least another 12 months.

The market for supplier financial risk monitoring is especially challenging because it’s complex, poorly regulated and not well understood — and this leads procurement leaders to make suboptimal choices (improper scoping, generic sourcing strategies, using “safe”-but-expensive incumbents, etc.) — leaving them underprotected and/or overpaying (sometimes over six figures annually!).

We’ll spend the rest of this installment time helping readers understand this market a little better and how to approach it more deliberately and effectively. We’ll also analyze some of the pros and cons of using various providers’ strategies and specific providers such as Bureau Van Dijk, CreditRiskMonitor, Cortera, Dun & Bradstreet, Equifax, Experian, FICO, RapidRatings and others.

2020 Predictions in Supplier Management: 5 Areas for Improvement in SXM [PRO]

In our other post today on SXM predicaments in 2020, we discussed some of the current predicaments around supplier management centered on supplier data, supplier segmentation and category management.

To address these issues, buying organizations need to get serious about supplier data management as well as overall supplier management strategies. Unfortunately supplier management is often a secondary responsibility for procurement organizations where the focus tends to be on sourcing and delivering savings. The exception is in some cases in the IT space where some organizations have established vendor management offices (VMOs) to manage the more strategic and critical supplier relationships.

The sourcing and savings focus also results in a lack of interest in making sure that supplier data is managed correctly. Onboarding suppliers often falls to accounts payable organizations whose focus is on making sure that the vendor master data is accurate from a standpoint of getting invoices paid and preventing fraud.

More mature organizations have, however, realized that suppliers need to be managed (not only sourced) and that there is an enormous amount of value to be realized through better supplier management and collaboration — as well as, in some cases, co-innovation.

But we also need improvement in the applications and technology to support this. In this Spend Matters PRO article, we will explore five predictions in how we think applications and the SXM market will evolve to meet these challenges and help procurement organizations manage their  suppliers better.

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.

ConnXus brings its ‘Smart’ approach to supplier discovery with new SmartSearch product [PRO]

supplier network

The supplier relationship experts at ConnXus on Wednesday announced the launch of SmartSearch, a new supplier discovery capability based on business intelligence that enables granular search across category, geographic and diversity criteria for millions of validated global vendor records.

SmartSearch takes advantage of ConnXus’ database of 22 million global suppliers to help buying organizations quickly identify potential suppliers that fit not only basic sourcing requirements but also various additional criteria, including diversity status and risk. It also bolsters the navigability of myConnXion, ConnXus’ open-ended supplier network, allowing ConnXus users to access richly maintained supplier profiles of current and potential partners as part of supplier discovery.

With SmartSearch, ConnXus is continuing to break further outside of its initial niche in the supplier diversity space, using its strengths in supplier master data management to power supplier discovery and sourcing efforts. This comes at a critical time for the Mason, Ohio-based vendor, which is defining its long-term vision alongside competitors Tealbook, Mastercard and others as they all attempt to define just what a next-generation supplier network looks like.

This SpendMatters PRO brief will look at ConnXus’ background and growing product footprint, like myConnXion that launched about a year ago; will provide an overview of SmartSearch; and will offer key takeaways about how this is an incremental release but an important one. SmartSearch is a key addition of usability for clients to get to all of the valuable supplier data available through ConnXus.

AI in Supplier Management: The Day After Tomorrow [PRO]

digital business transformation

In Spend Matters’ last pair of articles for the PRO series AI in Supplier Management, we reviewed some of the exciting capabilities that you will be able to expect in tomorrow's supplier management platforms, where we define AI, for the purposes of this article, as “augmented intelligence” because, as we've stated in our AI series, there is no true AI in any enterprise technology today.

In our initial entries of the series, we discussed how the advancements in usability and computing power have made it possible for platforms to implement better and more powerful guided on-boarding mechanisms that can allow a supplier to on-board from existing profiles more quickly and efficiently than ever before. We also discussed how embedded community intelligence will help you make better supplier selections, better performance monitoring will help you keep on top of performance problems before they lead to disruptions, KPI monitoring will identify a range of issues, risk monitoring will identify risks as soon as they come to pass, and resource assignment will be automated for common project tasks.

In our follow-up entries, we indicated that each of these capabilities would be improved with automated reasoning and machine learning technologies. Profiles would be automatically maintained. Community supplier intelligence will be augmented with supplier intelligence. Relationship status will be monitored in real time across all purchases and projects. When issues arise, corrective action plans will be automatically created. When risks are identified, mitigation plans will be automatically created. When resources are needed for more critical projects, they will be re-assigned, and projects realigned, in real time.

But is this the best we can hope for?

When we extend our event horizon out further into the future, we can predict that, at some point, industry-leading supplier management platforms are going to support:

— Supplier future state predictions
— Category-based supplier rebalancing
— Supply chain rebalancing
— Real-time order rebalancing

AI in Supplier Management: Tomorrow (Part 2) [PRO]

complex sourcing

In Part 1 of AI in Supplier Management: Tomorrow, we began our discussion of some of the AI-enabled capabilities that you can expect to find in tomorrow's supplier management platforms, where we define AI as assisted intelligence (because, as we have discussed, there is no true artificial intelligence in enterprise platforms today and there won't be tomorrow either). AI is a buzzword, not a reality. But we don't need true AI to achieve software that can radically increase our productivity. Reaching assisted intelligence will add multiples to our efficiency and effectiveness.

In our last article, we discussed how tomorrow's supplier management platforms will offer smart, automatic, supplier profile update (suggestions) — taking the headaches out of profile maintenance that results in most profiles being out of date in a supplier management system shortly after they are created; market-based supplier intelligence that is more in line and reflective with reality — and not just the experience of an anomalous customer subset; and real-time relationship monitoring that paints a relatively full picture of the relationship, not just a point-based performance picture.

So what else will tomorrow's platforms do to help you focus more on the strategic side of supplier management? Let’s look at the next three areas:

— Automated resolution plan creation, monitoring and adjustment
— Automated risk mitigation strategy identification
— Optimized real-time resource re-alignment

Tealbook: Vendor Analysis (Part 2) — Product Strengths and Weaknesses [PRO]

cloud solutions

In our last Spend Matters PRO brief, we introduced you to Tealbook, a five-year-old provider based out of Toronto (with an office in New York City) that is deploying a new platform for supplier information management (SIM) and discovery. Combining machine learning to accelerate data cleansing and gathering with a social media-like user experience to encourage collaborative supplier information management, Tealbook is gaining use cases and enterprise-class procurement customers that want to:

— Consolidate and better manage their supplier master data — aka the “I” (Information and Intelligence) in SIM.
— Discover and on-board new suppliers more effectively than 1) Google searches and 2) searches within proprietary supplier networks.
— Create a system of intelligence surrounding suppliers both internally (e.g., within a spend category team or project team) and externally through fully permissioned, community-based knowledge sharing.
— Quickly bring supplier diversity programs to target levels.

Part 1 of this brief provided an overview of Tealbook’s offering and a short selection requirements checklist that outlined the typical company for which Tealbook might be a good fit.

In Part 2, we provide a breakdown of what is comparatively good (and not so good) about the solution, a high-level SWOT analysis, and some final conclusions and takeaways.

AI in Supplier Management: Today (Part 2) [PRO]

As we have been repeating throughout this PRO Spend Matters’ AI series, AI is the reigning buzzword of the day in sourcing and procurement software. Supplier management is no exception. Just about every vendor out there trying to get an edge in the space is claiming to have AI, even if all they have is a pinch of RPA. That's why, in Part 1, we reviewed the technology ladder from RPA to "cognitive" — and insisted that while there is no true artificial intelligence out there today, we will start to see “assisted intelligence” and, later, “augmented intelligence” as the software gets more mature and more powerful.

And while we may not see true AI for decades, we do need assisted and augmented intelligence to efficiently and effectively do our jobs. As with supplier discovery, sometimes there is just too much supplier data to weed through to on-board, qualify, track and manage suppliers in an efficient and effective manner. It's really hampering our productivity.

But the right platforms will change all that. As per Part 1, the best platforms of today will:

— speed up and simplify on-boarding for us and our suppliers with auto-fill from databases, networks and third-party information sources.
— offer basic community supplier intelligence to provide quick, differentiating insights between suppliers with similar profiles but greatly differentiated capabilities.
— provide real-time performance insight and alerts to issues that need, or may soon need, attention from a real person versus just automated follow-ups with a supplier.


This is great, but it is not all they can do. We really need platforms that can be all they can be in order to truly take supplier management to the next level as an organizational practice ... versus a point-based endeavor with suppliers that we think are strategic or need our help.

The best platforms on the market today can also help with:

— automated issue identification — automated risk identification — automated resource assignment

And we will discuss each of these required capabilities in the rest of this article.

SupplyHive: Vendor Analysis (Part 2) — Product Strengths and Weaknesses [PRO]

digital

In our last brief, we introduced you to Supply Hive, a provider based out of Chicago that is deploying a new platform for supplier performance management (SPM), specifically around simplifying the process of gathering and analyzing supplier performance reviews. Combining savvy UX/UI design and an apt use of natural language processing (NLP), SupplyHive has built a supplier performance review solution that addresses an acute set of pain points quickly, easily and relatively cheaply.

In effect, it has created what may be termed a “stupid simple” app for supplier management in a market where few vendors effectively address this requirement. Yet the biggest challenges that Supply Hive could face may have more to do with the highly varying levels of maturity that procurement organization demonstrate in support of supplier relationship management (SRM) than in the adoption of the technology itself.

The first part of this brief provided an overview of Supply Hive’s offering and a short selection requirements checklist that outlined the typical company for which Supply Hive might be a good fit. In this part, we provide a breakdown of what is comparatively good (and not so good) about the solution, and some final conclusions and takeaways.

SupplyHive: Vendor Analysis (Part 1) — Background and Solution Overview [PRO]

The market for supplier relationship management and risk solutions is broad and fragmented. Procurement organizations have their choice of point solutions for single areas of the supplier management lifecycle, broader suites that provide SRM capability as one module among many, and consulting firms and service providers that offer technology as an add-on to engagements, to name a few options. As a rule, however, there is no single firm that provides a comprehensive solution to all components of supplier management. Instead, they tend to focus either on several related components (e.g., supplier information management, on-boarding and master data management) or specialize in a specific area, positioning their technology as a tailormade solution to a subset of SRM pain points faced by procurement organizations.

The latter strategy is how SupplyHive, a one-year-old vendor out of Chicago and San Francisco, has approached designing and marketing its software for supplier performance reviews. Aware that procurement organizations have handled this essential step in the supplier management process either through minimally supportive survey functionality in P2P and S2P suites or, more commonly, through enormous spreadsheets, SupplyHive set out to create a tool for evaluating employee satisfaction with indirect suppliers that could gather and analyze needed data about supplier performance while offering a streamlined, B2C-like consumer experience.

To oversimplify, it’s Yelp for suppliers.

But even with that seemingly simple concept, SupplyHive has managed, through savvy UX/UI design and an apt use of natural language processing (NLP), to build a supplier performance review solution that addresses an acute set of pain points quickly, easily and relatively cheaply — with clients such as Abbott and Sprint signing on as early adopters.

This Spend Matters PRO Vendor Introduction offers a candid take on SupplyHive and its capabilities. The brief includes an overview of SupplyHive’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

AI in Supplier Discovery: The Day After Tomorrow [PRO]

In our initial entry of the series, AI in Supplier Discovery: Today, we discussed how the advancements in usability and computing power have made it possible for platforms to implement better and more powerful search algorithms that can actually make searches useful across wide supplier directories and networks. Then, in our last entry, AI in Supplier Discovery: Tomorrow, we discussed how the inclusion of advanced semantic processing, high dimensional (fingerprint) similarity clustering algorithms, range and "like" search algorithms, and machine learning that can improve the algorithms over time as humans identify "good" versus "bad" matches will allow even better, smarter, more useful searches to be performed in the days to come for the identification of the right suppliers for direct categories and services.

But is that the best we can hope for?

While that is all we can hope for tomorrow, we can hope for even more the day after that. More specifically, when we extend our event horizon out just a little bit further, we can predict that at some point in the future, supplier discovery systems are going to support innovative supplier discovery (based on performance, need and soft factors) and predictive smart search (based on upcoming projects, performance profiles and real-time community feedback).

After EcoVadis’ Sustain 2019: Product Strategy, Roadmap and Prospect/Customer Analysis (Part 3) [PRO]

EcoVadis, which provides vendor ratings and scorecarding for sustainability and broader CSR metrics as a component of an integrated “many-to-many” supplier network and platform, has an aggressive product roadmap to expand how users interact with and leverage the supplier intelligence, which is at the very core of its value proposition.

Today, in this final installment in this Spend Matters’ PRO series based on our analysis from the EcoVadis Sustain 2019 customer event, we turn our attention to the future direction of where EcoVadis is expanding its capabilities. We also include customer/prospect recommendations.

In previous Spend Matters PRO coverage on EcoVadis, we offered a recap and update on the provider’s most recent capabilities and solution footprint — and an analysis of where EcoVadis fits in the broader supplier management and supply chain risk management landscape.