Even Accenture Pays Attention to Supply Chain Risk Management: A Five-Pillar Framework

Usually when Accenture points its thought leadership and strategy cannons toward a subject, it's after all of the early innovator companies that pioneered the adoption of given approaches and solutions have long come and gone. Consider strategic sourcing, for example. Relative to IBM, CG&Y, and ICG Commerce, Accenture was slow to build the bench strength and category expertise necessary to compete and win in competitive situations based more on the merits of provider capabilities and proposals than existing partner relationships. Hence, in this area, we ended up seeing the acquisition of Ariba's sourcing services division (See former coverage: here, here, here, and here) at least a couple years too late to take full advantage of market opportunity. Yet when it comes to supply risk, a topic on everyone's mind of late, Accenture is not sitting still. A recent article in Business Finance Magazine shows how much thought they've given to the subject (hint: they're not just regurgitating what they're seeing competitors discuss).

In the above-linked column, Michael Chagares, who serves as executive director of cross-industry risk management services at Accenture, makes a number of astute observations around the evolution of supply chain risk models (e.g., within the CPG market, companies are "scrutinizing global vs. local processes to determine which functions should be centralized and which should be managed locally, with guidelines, given the risks"). Moreover, he is right to suggest that companies should not simply aim to avoid risk but rather to "understand, manage and mitigate those uncertainties and risks in the supply chain in a smarter, more informed way." In other words, as we've recently said on Spend Matters (quoting an executive at a giant diversified manufacturing firm), the key is not just to take action or have a perspective, but to have a point of view on "explaining the unexplainable." Indeed, the not-so-simple act of being "smarter and more informed" requires both curiosity as a well as an analytical ability to create and test hypotheses all the time.

Further, I think Chagares views on what he describes as the "Five Pillars in a Risk Management Framework" are important as well, including "organization and Governance, which requires a well-defined organizational structure with explicit roles and responsibilities to direct and track decisions and identify risk ownership," as well as "Information Management and Data Governance" to "help maximize performance by synchronizing processes and coordinating across organizational boundaries, processes and regions." Procurement organizations that simply think buying a supplier management or supply risk management toolset or enriching spend data with D&B, Equifax or BvD information would be well informed to consider the Accenture view on the topic.

- Jason Busch