Segmenting the Supplier Information and Relationship Mgmt. Market

In the past few months, I've had dozens of briefings and interactions with vendors that offer approaches to help organizations better manage supplier information and relationships (including risk). And my, I can tell you, it is a confusing and fast growing list of providers that can help. It's also one that I've had a difficult time segmenting and explaining when I'm asked by practitioners what they should be thinking about. But fortunately, I think I've stumbled upon a relatively simple way to explain it. In a recent demonstration with one of the providers yesterday, it dawned on me that there are really three distinct angles that vendors are taking -- and three distinct mindsets. None of these are better than the other, but they might provide a way -- based on your own specific needs -- to identify the class of provider that is right for you. Or, in some cases, the classes of provider that you might need to solve different challenges.

The first group of providers fall into what I'll term the documentation and relationship / process optimization bucket. These are providers that fundamentally approach the supplier information and relationship management challenge from the vantage point of documenting supplier credentials, certifications, relationships and other requirements. They also aim to optimize the overall supplier relationship and streamline international processes for managing suppliers. In some cases, organizations might use these providers to manage only a subset of their supply base for certain programs (e.g., performance, environmental compliance, supplier enablement, etc.) But in others, these programs will focus on getting 100% -- or close to 100% -- of a supply base on-boarded or into a centralized system. In the later scenario, companies might opt to manage basic information for the broader group (e.g., certifications, risk) while taking a highly focused, deeper relationship and information management approach with a select sub-set of suppliers for specific programs (e.g., performance) or based on the value of that sub-group to the business. What providers fall into this bucket? Hiperos, Aravo, Browz, VendorMate are four that come to mind immediately, but I'm sure there are more. For performance only, Emptoris and BravoSolution also come to mind.

The second group of vendors fall into what I'll term the data centric and data management bucket. These are companies that come from a primary background of managing specific aspects of supplier information often on multiple tiers (e.g., diversity data, trade/manifest information, etc.). Many might also have a background or some capabilities in the spend visibility arena as well. With these companies, managing supplier content for the vendor master -- whether it is coming from internal systems for validation or is enriched with proprietary or third party data -- is a core strength and focus. Vendors that fall primarily into this bucket include D&B (non DNBi), CVM Solutions, AECSoft, Panjiva and SupplierForce. Please note that some of these providers do not compete at all (e.g., Panjiva and SupplierForce look completely different from each other and the others listed above -- but the orientation and focus on data, albeit different classes and categories of data, as a core component remains).

The third bucket is probably the least mature and most in need of more providers at the moment. And that's the supplier information and relationship analytics and predictive forecasting/monitoring arena. These vendors help companies leverage their own information -- and possible third-party or proprietary data -- to make better planning decisions through deep analytical capabilities and / or predictive monitoring and forecasting. DNBi supply risk (which curiously still has the "Open Ratings" name in the URL on the D&B website) is one of the few providers in this group today -- and the only one for predictive supply risk forecasting at this point in time (at least that I've been able to find). Others, who focus more on supply chain and supplier modeling and scenario planning include Jonova and Llamasoft. An alternative approach when it comes to predictive monitoring is to pursue models -- and providers -- that enable and focus on prediction markets or community based ranking as part of controlled social networking to forecast -- and make decisions on -- future supplier performance.

So there you have it. This segmentation is most certainly a work in process. But hopefully it will prove a useful starting point based specifically on what companies are looking for when it comes to supplier information and relationship management. BTW ... if you'd like to tell me I'm full of it and you've got a better segmentation approach, please flame away. I'm after getting this right and I have no pride of ownership in what I've listed above.

- Jason Busch