Category Archives: Compliance

The Prophet‘s 2024 Procurement Prediction Number 10

A “CFA-like” Credential Emerges in Procurement and Supply Chain B+.

The Prophet says that the procurement and supply chain industries, similar to most others, excluding finance, are lacking any certifications/credentials, by those “in the know,” as a superior qualification for a job than even a top degree from a world-class or specialized university which is totally true.

The Prophet also says that organizations such as CIPS, ISM, SIG, etc., might disagree with this viewpoint which is also totally true. The Prophet does note that he supports all of these organizations, which the doctor does as well, and that he believes their training materials are highly valuable, which the doctor doesn’t across the board. (the doctor has seen some of their training materials. While some of their training materials provide a very good foundation, some of their training materials are not so good. Most of these organizations are very weak when it comes to analysis, tech-backed processes and practices, government/industry specific compliance requirements, risk management in today’s increasingly fragile global supply chains. etc. But when so many Procurement departments are struggling with the basics, understanding what their role is, and how ethics should enter the equation, we do need these organizations and that is why the doctor supports them while reminding you to do your homework when it comes to training. Use them for their strengths, not their weaknesses.)

The Prophet then suggests that in 2024, credentials will take on new meaning, and the best ones, particularly those challenging to obtain and requiring rigorous exams (which many fail), similar to the CFA in finance, will begin to take on a new significance in Procurement.

the doctor agrees with the principle, but does not agree it will happen this year, or even next year. Why? This will only happen with industry regulation, and that only happens in two situations.

  1. when an industry-led body gains enough support from the majority of professionals in an industry to make it a de-facto requirement in any employer of any size to get a high-level procurement job; no organization yet has that weight, and we’re not going to see the NLPA, SIG, APS, etc. all fold into the ISM, and definitely not into CIPS, which is pseudo-global (as it has made progress in some of the Commonwealth); this means that we’d need to see a new industry initiative that gave all parties representation and allowed them all to contribute to the standard and exam — for this to form, a certification to be adopted, and a test accepted will take years
  2. when a government forces a requirement that can only be met by a certification (and either creates their own or adopts one); governments move slow, and when we have the situation in the US where
    1. the republican focus is on ripping democrats apart for what they didn’t do, rolling back human rights to the fifties, and installing a wannabe dictator as President-for-Life
    2. the democrat focus is on shaming the republicans, selectively protecting the human rights they want, and taking up the former republican war mantle (since Trump just wants to be a dictator, which doesn’t profit the military complex) and doing everything they can to back Ukraine and Israel (including risking World War III with their Middle East bombing of Yemen vs. just destroying every Houthi vessel launched into the water)

    and the situation in the UK where

    1. the conservatives are too busy trying to keep Dishy Rishy from making them the laughing stock of the political world (as he’s so far disconnected from the common person he has no clue)
    2. the liberal (democrats) are too busy trying to counter the conservative support for the global wars and lack of focus on the situation at home by being extra woke (and we know how that fared in America) …
    3. when we look at the NHS mess and postal service mess and their apparent unwillingness to do anything meaningful about it (for longer than should be humanly possible to ignore a crisis), it seems that good procurement is the last thing on their mind

which are the two countries that would need to lead such an effort (as the EU is very focussed on climate change and AI and struggling to hold itself together now with active protests in about a third of its member states on any given day; heck it’s too focussed on attacking the farmers, already forgetting what happened when Stalin called the Farmers the enemy of the state. (See this article, for example).

Thus, while such regulation is sorely needed, it’s not likely to happen, if it happens at all, until the later part of the decade (unless, of course, The Prophet and the The Public Defender want to once again band together and take up the charge and lead the effort to bring all the necessary parties together).

The Prophet was dead on with three of the primary reasons we need it.

  • GPAs are no longer a measure of academic performance in many universities.
    The Prophet notes that, according to the Yale Daily News, “Yale College’s mean GPA was 3.70 for the 2022-23 academic year, and 78.97 percent of grades given to students were A’s or A-’s,” including the hard sciences and engineering! He also notes that the Michigan State Broad Business School (which includes the Supply Chain and Procurement degree programs) also experiences significant grade inflation, with 80% of students in 3 out of 5 undergraduate classes earning a 4.0. (Source)
    The situation is even worse in China where you don’t even get accepted to some Universities unless you are an A- or better student, and where you are under intense pressure to maintain that A, to the point where a student will drop out (or commit suicide) rather than risk being thrown out for not maintaining it. Now, this would be great except for the fact that As are often contingent on rote memorization and learning to do the work the “state way”, not always with any free thinking whatsoever. (And then graduating ONLY if they think you’ll agree to share what you learn when they allow you to go outside China for that Post-Doc/Professor position).
    The situation is better in Canada [except Quebec], but there are some Universities / Departments that are under great pressure to remain competitive to maintain grant and industry funding, and others where the professors are so overworked that they don’t even bother to confirm that a Master’s student in Engineering can manually calibrate an oscilloscope or a Master’s student in Computer Science can appropriately identify and test for all boundary cases in a simple procedure. (Remember, the doctor has been a Professor, and maintains regular contact with Professors and knows this to be truth.) How could you trust either to validate your equipment or your code? (He couldn’t!) (Regarding Quebec, the current premiere is taking Quebec’s status as a nation within a nation and essentially discriminating against anyone who is not French and willing to speak French as a first, and only, language. [See this article, for example.])
  • DEI/affirmative action preferences, which still exist (despite the supreme court ruling and their illegality if they enforce admitting or hiring a less qualified candidate), have removed objective academic criteria in both degree-based programs and industrial training programs. This has resulted in candidates who might only be a D being admitted to programs because of their minority status while non-minority candidates with Bs were excluded.
  • The best talent may no longer be pursuing traditional college or graduate programs. There needs to be an objective means of evaluating hard and learned skills for those who cannot afford or do not wish to invest time in university studies, especially those who have taken industry training programs or annex courses specific to what they need as well as obtained relevant real world experience under a mentor. (There’s a reason there used to be apprenticeships; some learning onlly happened under the guidance of a mentor.)

The only other reason that needs to be mentioned in the doctor‘s view is

  • without a certification, how can you know that any candidate, no matter how experienced and skilled they appear, knows all of the foundations you need them to know? With so many different definitions of sourcing, procurement, and purchasing; so many different thoughts on what an individual should know about analytics, supplier identification, supplier vetting/onboarding/management/development, negotiation, contracting, global trade, logistics, risk identification and management, compliance, finance / finance support, etc., how can we have a solid baseline with a (multi-level) certification program?

It would be great if 2024 is the year that we saw this certification, but while we desperately need it, the doctor believes that, unfortunately, it’s still years away. (But he will challenge The Prophet to step up and make it happen!)

Brooklyn Solutions: An Answer to Your Third Party Compliance Management Challenges!

In our last article, we introduced you to the oft-overlooked area of Third Party Compliance Management which is not adequately addressed in the majority of Third Party Risk Management solutions, despite beliefs to the contrary. And those of you who pay attention probably realized that in addition to telling you about the challenge, we were also going to tell you about one potential solution (and give you a starting point in your research).

One starting point is Brooklyn Solutions, founded in 2018 to automate and scale vendor management for compliance standpoint across the enterprise. In order to ensure compliance, they offer not one, but four core modules to address all the relevant areas — third party risk management, third party relationship management, and third party contract management in addition to third party compliance management (as they all feed into the compliance pie) — as well as two auxiliary modules for ESG (which is an area all its own) and Digital Assessment Frameworks (for automated digital assessments in the supply chain tail). They already have global customers with over 1,000 users across multiple industry sectors which they support with offices in the US, UK, and South America.

Note that their holistic approach to compliance management (by tracking the vendors the organizations interacts with, the contracts that govern key relationships, and risks they are subject to in order to collect the necessary information to ensure compliance) is not just because of the criticality of compliance (as lack thereof can result in massive fines and even criminal charges to executives in some countries), but because a lack of compliance with organizational policies and contracts can lead to an average overspend of 9% to 15% in contract value in an average organization as per Gartner, Deloitte, PWC, McKinsey & Company, Bain & Company, CIPS, and the WorldCC. In this economic climate, that’s not something any company can afford!

Considering how many CLM solutions are on the market, you’re probably wondering how so much value leaks, especially since the classic cause of lavish leakage was due to lack of good e-Procurement systems that could m-way match the invoice to the PO, the pricing to the contract pricing, the line items to the goods (and services marked) received, and so on to make sure what was paid was what was agreed to. That’s because most CLM systems that claim to “govern” a contract are actually just glorified electronic filing cabinets that track the metadata and alert you when it’s expiring. And even if they allow you to break out obligations, most don’t track the extent to which they are mapped, monitor the risks that can lead to disruptions that can lead to a significant loss, assess the downstream parties that can put you in non-compliance, ensure performance is at agreed upon levels, and so on. Furthermore, even though the more advanced systems will support negotiation, all that does is allow you to identify value (not capture it), or perform (process) analytics, and that’s just helping you get efficient in the partial process the system supports, not efficient in capturing the value. That’s why Brooklyn Solutions focuses on ongoing contract and risk management from a compliance viewpoint AFTER the contract is signed rather than focussing on all of the pre-contract-signing and onboarding activities that the majority of traditional S2P, CLM, and TPRM vendors are focussed on.

It does this by allowing the organization to define as many workflows and actions as it needs to define in order to ensure all processes necessary for compliance are met. The workflows can be tailored to precisely what the organization needs. We’re not going to go too deep into workflow construction, as you’re probably familiar with how it will work if you have a supplier / third party onboarding platform that also allows you to configure the process, but point out one key difference between workflow construction in Brooklyn Solutions vs. many other platforms. The one key difference we are going to point out is that the logic is not only conditional and fine grained but can trigger other processes based upon the responses which can themselves trigger other processes and allow for as much branching as needed to get the information an organization needs to manage the risk, maintain the relationship, fulfill the contract, and ensure compliance — and these (sub) workflows can even branch back into the right point of the main process when the time is right.

These workflows can also punch out to third-party systems and automatically pull in risk and compliance data into the platform, data which can trigger new risk and compliance workflows if the data that comes back is too risky or potentially non-compliant. The configuration capability is extremely flexible. Essentially, Brooklyn Solutions is an orchestration platform built for managing third parties, contracts, risks, and compliance in a cohesive whole.

Contract Management Overview

Since the contract management solution is focussed on obligations, SLAs & KPIs, issues and workflows and was designed to help the organization ensure that the negotiated terms are adhered to, and value achieved, it’s functionally a meta-data driven application and the entry point is an analytics dashboard that gives you deep contract analytics on obligations, reviews, documents, SLAs, (open) risks, and (current) actions. It’s easy to dive into any aspect and see detailed status; this includes diving into obligations and getting an overview of how many are pending, overdue, and non-compliant; into (open) risks and see those where there are actions and the status of associated actions; into documents and how they breakdown by active vs inactive contracts, addendums, etc.; and so on.

The obligation tracking is exceptional. You can fully define what the obligation is, who is involved, what workflow is required to complete it, whether or not it’s a critical path obligation for a contractual, risk, or compliance requirement, the relevant financials, and the frameworks being used as well as track activities and associated action items, associated documents, and status. The obligations can also be linked to related parties in the supply chain and tracked down to the source supplier or supplier that need to adhere to them easily using Sankey Diagrams.

Relationship Management Overview

Relationship management in Brooklyn Solutions isn’t the touch-feely relationship building that Procurement sells as a way to become a “customer of choice” and “reduce costs”, nor is it the activity definition and tracking capability of a traditional old-school SRM application (where the “R” stands for Relationship, and not Risk). It’s a data and metric tracking application focussed on SLAs and KPIs, performance scorecards and monitoring, and regular policy and governance reviews to ensure everything stays on the up and up.

It’s also one of the perfect solutions to plug into the Customer-Supplier-Management gap left by P2P/S2P systems between the PO and the Invoice as it allows you to

  • onboard suppliers and ensure core data requirements are collected and fulfilled
  • quickly get complete, 360-degree, supplier profiles
  • define and assign actions and issues and track the status
  • collaborate with the third party at any time
  • kick of governance reviews as needed

Supplier profiles not only consist of basic organization and contact information, but all associated contracts and documents, obligations, risk profiles and data, performance data and scorecards, associated actions (in all states), and interactions including meeting minutes and upcoming meetings. They also allow you to drill into the relationship hierarchy UP and DOWN the chain.

Risk Management Overview

The risk management application is all about tracking organizational risk ratings (as well as what a supplier can do to reduce their risk rating), risk indicators and monitoring risk levels and allowing the organization to quickly find out, for any supplier contract, obligation or compliance requirement what the currently assessed risk is. They are colour coded in a matrix that allows a buyer to quickly dive into the high or moderately high risks that could pose a critical compliance risk, dive in, and address them.

It’s also very easy to get an overview of the entire portfolio of risks tracked in the system, the risks with the worst scores or least/no controls, the suppliers with the most concentration of risk, the individuals who own the most risk (either through suppliers, contracts, relationships, etc.), and so on. You can quickly identify the high risks, which ones can be reduced, what can be done, and how the effort can be initiated, and kick it off.

All risks are scored on a 1 to 25 scale that is meant to gauge the impact vs. probability which is mapped against the organizational typical risk tolerance to quickly identify those risks that are too high with respect to organizational tolerance (red), slightly higher than tolerance (yellow), and well below (green), with orange between yellow and red and dark green between yellow and light green.

Compliance Management Overview

The fourth, and most important of the four primary modules, is compliance management which, unlike prior generation compliance and GRC (Governance, Risk, and Compliance) solutions that were built to help you collect compliance data for reporting, was designed to ensure the organization was digitally fit for audit. And yes, there’s a difference. When a platform collects data simply for the purpose of completing a report, it’s a static piece of data in one place that can be queried individually or spit out as part of a pre-coded data dump for report creation. It technically solves the reporting problem, but it doesn’t solve for audit.

When your organization undergoes an audit, it’s more about the data that goes in an annual report. Where did it come from? When? Who verified it? Why was it deemed acceptable? Did you explore all of the necessary elements in making the determination?

For example, if you’re undergoing a GDPR compliance audit because someone complained that you don’t protect personal data and you hand over a report that says all the personal data you have is encrypted, and that you have annually tested processes in place to verify that all personal data you aren’t legally required to keep by law on an individual can be quickly deleted, it still doesn’t satisfy a compliance audit if you use third-party data services (“processors”) to store and process some of that data.
If you haven’t a) fully verified they are fully compliant with the regulations and can do the same purges in your tests and b) fully verified any third parties they use can do the same, you can’t claim to be fully compliant. For example, a cloud service might use a third party for managing its database and another cloud service to identify personal data that might not be appropriately tagged. If those third parties used by your cloud service aren’t fully compliant, then your cloud service isn’t fully compliant and you aren’t fully compliant. And that’s trouble that you would not identify in a compliance solution built for reporting and not for audit.

Since Brooklyn Solutions was built for audit, you can drill into the supplier profile, see their connected parties, and, in particular, the third parties that manage their systems and data and whether they have completed their audits, have the appropriate certifications, and run (and report) the proper tests annually. If not, you can reach out to them directly, send them the surveys, collect the reports, and do your own compliance analysis if you need to. And then, when the auditor comes in and asks you to prove you did the necessary exercises to ensure compliance, you can go into the system, show them all the parties you directly deal with that may have access to your customers personal data, drill into them, show that you know all their suppliers, show that you ensured that each of them were compliant, and so on down to the last service provider in the chain that may, even indirectly, have access to your customer’s personal data. Since it can handle the GDPR example above, which is one of the toughest audits you could get, you know it can handle any other supply chain audit as well.

No matter what question the auditor asks about a report you submit, with a few pieces of information and a few clicks, you can drill in to not only show exactly what answered, but where the data came from, why, what processes you used in collecting it, and how confident you were. You can also show all of the historical actions, reviews, in-platform conversations, documents, etc. It’s a full fact-based history, not a partial viewpoint based on the memory of the best organizational expert.

Also the holistic TreeMap overviews of compliance areas or risk areas (based on financial risk impact or some other indicator) makes it quite clear to an organization just how well they are doing, or not doing (and quickly dive into the areas where the compliance is the least or the risk the highest).

The only real shortcoming is that, while it can be configured to ensure compliance for any global regulation you can think of, as of now, only four compliance requirements are fully supported out of the box: the German Supply Chain Act, the EU EBA/EIOPA guidelines, the UK PRA Outsourcing regulations, and GDPR. This is because they’ve spent the last five years building all of the core capabilities required for holistic third-party compliance management (and started in the Financial Services sector, coding for those regulations first).

However, now that they’ve built and fleshed out all the core capabilities, and natively integrated it all into one consistent view (for every module you purchase), which is backed up by powerful AWS QuickSight dashboards that can be drilled, filtered, and searched on any data dimension, they plan to start adding more out-of-the-box support for global regulations over the next few years. Whether it will be by area (of ESG, CSR, etc.) or industry has yet to be determined, but with all of the necessary capability built into the platform, it won’t be hard for them to add more acts in a relatively short time frame. It’s just regulatory expertise, obligation data element identification, and workflow coding at this point.

Roadmap

With respect to Brooklyn Solutions‘ near-term roadmap, they will soon be releasing a number of “Gen AI” capabilities built on appropriately trained next-generation large language models (LLMs) for natural language processing (NLP) that use human curated data sets relevant to the problem at hand. These new capabilities, which are designed to increase user efficiency, could make some users three times as efficient (or more) in their jobs as they are now. (Right now, power users in the platform have been measured to be 200% more efficient in their responsibilities than before when they were working without the help of Brooklyn Solutions.) The new “Gen AI” capabilities are being deployed to power the following new capabilities:

Meeting Agenda Generation
Identify the supplier or action team, and the platform will scan all associated actions, flows, contracts, risks, and compliance requirements and create an agenda based on open / incomplete items and changes since the last meeting (which can be quickly edited or adjusted based on the desires of the meeting organizer)
Executive Meeting Summary
Attach a transcript of the meeting meetings (which can be auto generated using the transcription capability of most modern video conferencing platforms) and any supporting documents and it will generate an executive summary
Report Generator
Similarly, select a supplier or contract and time-period, and items of interest (events, contracts, risks, compliance requirements, etc.) and the solution will generate a written summary of the items of interest, highlighting those that are (scored) high or low, fully formatted and exportable to docX, xlsX, and pptX
Automated Survey Creation
Identify the risk, capability, and/or compliance requirement you are concerned with, where you are concerned with it, how concerned you are with it, and how intrusive / work intensive you want it to be for your suppliers (by way of a max question count) and the platform will use its built-in knowledge of the risk, capability, and/or compliance requirements and its library of surveys/templates to auto-generate a survey and send it to all suppliers in, or dependent on, the region in question
Contract Clause Explainer
Highlight any clause in the contract and the solution will translate that clause into everyday layperson English (or for those clients in the UK, the King’s English on special request, as that requires a special configuration), and provide one or more examples of where that clause would come into effect and/or how it may be used
Contract Search by Topic
For example, if you want to identify all clauses in a contract that might relate to or satisfy GDPR, the solution will automatically identify the key requirements of GDPR, determine the most likely terminology that would appear in the contract, search for that, contextually analyze the clauses, and return those most likely to relate to GDPR with an everyday language definition of each. The same can be applied to any “contract clause” you can define, such as termination, audit right, price increase, and sub-contractor to name but a few.

Summary

In a nutshell, Brooklyn Solutions is one of the most complete Third Party Compliance Management solutions the doctor has ever seen. If compliance is an issue for your organization, be sure to add them to your shortlist.

An Introduction to TPCM: Third Party Compliance Management

TPRM: Third Party Risk Management is Big. Really Big. In fact, as evidenced by recent investments over the past year (Spectrum’s 200M investment in RapidRatings in 2022, Vista Partners acquisition of Resilinc, and now the 1.2B acquisition of Exiger by Carlyle and Insight), it’s HUGE. Actually HUGE! (Not Trump huge. In fact, the exact opposite. 😉 )

Why? The pandemic finally caused the space to wake up and realize not only how significant long-term disruptions are, but how much risk has been embedded in over-extended global supply chains over the last thirty-plus years (thanks to the global sourcing craze started by the Big X and Mid-Sized Consultancies that chimed in during the 90s as a method of “cost savings”, which really just resulted in “spend transference” to big consultancy pockets and the buildup of risk, and risk related debts, in the supply chain that, just like technical debt, always comes due someday). Big corporations have finally realized they need to manage that risk, or at least maintain constant visibility into it, if they want to get the supply they need to just stay in business. (At the end of the day, “cost savings” don’t matter if you don’t actually stay in business, which is what happens when you don’t receive any products to sell. So you need to assure supply first, and then avoid unnecessary cost second — especially since there is no real “savings”, just cost avoidance with improved processes, designs, networks, management, etc.)

As a result, these companies, who were mostly clueless about the risks (sometimes by choice), needed solutions now to at least get insight into the risks so they could plan mitigations, or at least take action when something happened. Since their traditional enterprise / manufacturing resource management, supply chain, source-to-pay, or back-office systems didn’t give them the insight they needed, they finally started to turn to TPRM (and in some case, broader SCRM – Supply Chain Risk Management) systems in a big way.

And that’s great. Until it isn’t. As a result of all of the supply chain failures and the impending disasters they created across supply chains, not just health and defense, governments have started taking action and introducing a lot more regulatory compliance into the mix. This is at the same time they are waking up to the wild west of technology and introducing a lot more regulation into the mix around personal data and use of AI. And with fraud and money laundering seemingly increasing without end, there’s a lot more regulation around partner due diligence. And then there is the reality that the world is heating up (whether you believe in climate change or not), that this heating up is contributing to an extremely substantial increase in natural disasters, that temperature is correlated with carbon and greenhouse gasses (GHG) in the atmosphere, that we are currently producing a lot of carbon and GHG as a species, and while we may not have been entirely responsible for getting here (as there are other factors that cause temperature to naturally rise and fall on a planetary scale — although the changes we’ve seen in the last few decades have historically taken centuries or millennia looking at the geological record), we need to do everything we can to not make it worse (or risk natural disasters on a scale that have not been seen for millennia, and that have sometimes even led to extinction level events in the past). In response to this, countries are making commitments to the Conference of the Parties of the UNFCCC and instituting legislation limiting the carbon you can create (without fines or fees to offset that, presumably fines or fees that will be invested in greener energy options, but we have to admit many governments haven’t thought that far ahead) and the amount of other pollutants you can pump out.

In other words, not only do companies have to worry about more risks than they are aware of, they also have to deal with more regulations than they can easily keep track of (and, when they’re not on the ball, they don’t find out about them until they get a fine) — as well as dedicate way more time than they should gathering the required information for, and filling out, the appropriate reports and filings.

Moreover, and this shouldn’t surprise you, the vast majority of TPRM (and even SCRM-TPRM) systems don’t help with this at all. While they can be configured to detect issues that may represent potential violations, they generally don’t collect the reporting data that is required and typically don’t provide the detailed trickle-down visibility that is needed to verify that key requirements — such as personal data protection, no forced labour, etc. — are truly adhered to throughout the chain.

That’s why many big multi-national organizations, especially those that collect and process personal data, do a lot of global importing or exporting, or deal with extended supply chains and have to comply with extensive privacy regulations AND data protection laws in the finance sector, have to comply with hundreds of sanctions and denied party lists globally (as well as ensure there are no connected beneficial entities on those lists), and/or need visibility down to the source on human rights needs a solution that understands the regulations they are subject to, encodes the data they need to collect and the violations (special types of risk) they need to monitor for, and helps them produce the reports and regulatory filings they need to make.

And the only system that can do this is a Third Party Compliance Management solution, which has some commonality with a Third Party Risk Management solution, but also a lot of differentiation as well. Most organizations won’t know they need such a solution, as they won’t even know that such a solution exists (as there’s not many solutions and not much buzz about them … yet). Hopefully this post will change all that. Even though the solutions are two sides of the same coin, the sides haven’t met yet, and until they do, which could be years (and years and years) away (because no one has really thought about the hard center yet), for many companies, what they really need is a TPCM solution.

Source-to-Pay+ Part 9: Cyber

In Part 1 we noted that Risk Management went much beyond Supplier Risk, and the primitive Supplier “Risk” Management application that is bundled in many S2P suites. Then, in Part 2, we noted that there are risks in every supply chain entity; with the people and materials used; and with the locales they operate in. In Part 3 we moved onto an overview of Corporate Risk, in Part 4 we took on Third Party Risk (in Part 4A and Part 4B), in Part 5 we laid the foundation for Supply Chain Risk (Generic), in Part 6 we addressed the first major supply chain risk: in-transport, followed by the second major supply chain risk: lack of multi-tier visibility in Part 7. In our last article, Part 8, we discussed the baseline Analytics that should be part of all of the different risk systems we covered in Parts 3 through 7, as well as a control centre.

Today, in Part 9, we move onto Cyber Risks. In today’s hyperconnected SaaS world, nearly half of an organization’s data breaches originate in the cloud (see this recent article by Illumio on Cyber Magazine, for example). So cyber security is important, but not just for your organization — for your entire supply chain.

Note that we are not going to dive deep, there are plenty of security firms that will do that for you. We’re just going to highlight key points of risk that must be covered in your cyber security plan.

Internal Cyber Risk Monitoring and Prevention System
Risks that must be addressed.

Risk Description
E-mail Plenty of risks come in through e-mail. The biggest one you are likely aware of is fraudlent requests for payment from fraudsters posing as fake suppliers / service providers / consultants or new employees in a remote office asking you to approve an emergency payment. However, since fraudsters blast these far and wide (as it takes less work to create them), the most common fraudulent emails are usually phishing/ransom attempts where you have to click an email and enter your system login information to retain access to your email account (or another system you use). (Then they use those credentials you freely gave them to login to your systems, lock you out of them, and demand payment to unlock your account.)

Your email system needs to do more than identify an external sender. It, or the security plug in, needs

  1. to verify the originating domain of the email (since most fraudsters can’t mask the domain they send from),
  2. to identify the domain and location of the first intermediate server the message hits (since that can’t be masked unless they’ve hacked that) as well as if it matches the locale of the domain the email purports to come from, and
  3. to identify the domain of each embedded link and the company it belongs to (as fraudsters are great at registering domains just ONE letter of an actual domain and cloning the contents of the faked domain; e.g. chaEse.com vs chase.com … one is your bank, one will soon be scooped up by a fraudster who will skim account logins for a day during a “maintenance window”, then drain all the accounts dry (or at least to the transfer limits) the next day and wire the money to a foreign account in a jurisdiction with no extradition or banking treaties with the US, then empty the account the day after that, and then disappear never to be seen again …
Hacking Hackers will constantly be trying to penetrate your firewalls, the web servers and underlying operating systems of machines in the DMZ, the applications you are running, and the underlying security systems you use for monitoring and detection (but these are likely the most secure, especially if you are having them maintained and monitored by a professional, big name, IT security firm); You need to be monitoring for unusual activity, (D)DoS attacks, repeated login failures or access abandonments at particular ports or in particular application logs, and so on; You also need a few attractive honeypots that emulate the systems the hackers would want to access most, and if you don’t understand this, or why, talk to your security guru.
Ransomeware Hackers want to access your systems for two reasons, to steal money and IP or lock you out of them (if they can’t access any IP worth stealing or you don’t use any finance systems capable of [authorizing] payments) so you will pay them to get back into your systems. You need to be very careful to not only detect hacking attempts, but the installation of new software that is unrecognized / not authorized by security. This is because you could be totally screwed and have no choice but to pay the ransomware even if you do complete, incremental, daily backups across all systems because smart hackers will install the ransomware, let it sit for a few weeks or so, and then activate when you can’t roll back to a backup because you’d lose weeks or months of data (as you’d have to roll back to just before the ransomware was installed because the majority of backup systems would not be able to identify the actual file changes and there’s no way you could do a restore and not restore the ransomeware after the ransomware was discretely installed).
Infected Websites Your users love to surf, surf, surf the web and go where the hidden links take them. You can’t expect they will all keep their browsers up to date, keep the underlying OS up to date, and, simply put, not be careless. You need to enforce security software on their machine, and check for it, before that machine accesses your network and that the security software is up to date because if they visit the right infected website (from a fraudster’s point of view), it can be an instant hack and/or backdoor for the automatic installation of ransomware on their machine and/or your network.

External Cyber Risk Monitoring and Prevention System
Risks that must be addressed.

Risk Description
Compromised Supplier Site If a supplier site or system is compromised, and you engage with that system in any way, then your system could be compromised. You need a system that monitors for supplier system/site/cloud risks as well as (known) supplier breaches.
Compromised Data All of your systems run off of data. Compromised data is the easiest way to compromise a system. If an email gets intercepted and altered in-transit with a man in the middle account and the hacker changes bank account information, you’re paying a fraudster and not the supplier. If the third party risk metrics are adjusted, your system can be tricked to diverting all business to a single, new, supplier which, while a legal entity, was setup by the founder to take your money and run. And so on.
Compromised Identities Identity theft is on the rise, and it’s often the easiest way for a fraudster to get funds from a business. You need to track all known cases of identify theft associated with all individuals associated with all businesses associated with your business as you will need to do extra verifications on requests from those individuals.
Web-Based Vulnerabilities You need to be aware of where the biggest web-based vulnerabilities are in your suppliers and partners, make sure your suppliers and partners monitor and address those, and make sure you lock down your security to the max when you have to interact with their systems that are classified as high risk for vulnerability.

And more. There’s a lot of risk in cyberspace thanks to the fact that the information and financial worlds have merged, and your organization needs to be on top of it. Identify appropriate providers, or you will need very good luck to not fall victim to a significant cyber-based threat.

Visibility into Vizibl, The Collaboration Platform for True Supplier Innovation

It’s been a decade in the making, especially since it took years for Vizibl (founded in 2013) to find it’s focus, but what was once yet another SRM (Supplier Relationship Management) platform is now a truly leading Supplier Collaboration, Innovation, and Transformation platform.

Starting out with the vision of a better SRM, it took a while for Vizibl to find its niche and double down on it. In fact, it took years of working with clients with highly specific (customization/process) needs for them to realize that they were good at developing for and supporting specific, sometimes, complex processes and years more for them to sit back and identify the commonality, design standard project and service layers, and bring them to market. But they did, and they have, and we will discuss the first major project/service layer they are bringing to market later in this article.

The Vizibl platform has seven main components:

  • Supplier Information Management Foundation
  • Supplier Collaboration Workspace
  • Supplier Innovation Hub
  • Supplier Relationship Management Module
  • Dashboards, Analytics, and Reporting
  • Program Layer: (Foundation for) Specific Development/Improvement Programs that Cross-Cut the Entire Platform
    (built on a virtual platform integration layer)
  • Supplier Sustainability Management

1. The Supplier Information Management Foundation is what you would expect from a leading SRM platform — it can track all of the core data and meta data you would expect on a supplier and can be extended as needed to track all of the data you require across all areas of supplier information, products, risks, compliance requirements, performance requirements, contracts, projects, initiatives, and activities you wish to manage.

Supplier Onboarding is straight forward as it’s quick and simple to create a new company record to begin the process, with only minimal data needed. New suppliers can be onboarded as standalone, children of an existing company, or related entities. The platform can maintain complex supplier tree relationships and the tree can be visualized along with a roll up of relevant metrics, project counts, and appropriate relationship data.

2. The Supplier Collaboration workspace is where the buyer can communicate with the supplier, spin off action plans and initiatives, store ideas and plans, pull in and push out data as needed, and put thought into action.

3. The Supplier Innovation Hub is where the core of the magic happens. This is where challenges can be issued, goals set, and projects planned. It’s where projects are defined to increase supplier performance, improve product designs or manufacturing, increase sustainability, or decrease CO2/GHG emissions.

Projects have activities (or tasks), roadmaps that link them together, objectives (outcomes), value tracking metrics, integrated communications, and teams.

4. The Supplier Relationship Management Module is the glue that holds it all together. In addition to integrating all of the pieces, it also supports the creation of basic supplier action/account plans, the definition of strategic objectives, and integrated overview dashboards. It also allows for the definition of supplier teams (that it calls circles) that represent the different teams the organization will be working with, the management teams, and boards of relevance.

5. The Dashboards, Analytics, and Reporting capability is used to summarize and display the various types of data, metrics, and indicators tracked by the platform. These dashboards cannot only roll up metrics across the platform, but can also roll up metrics in, and across, projects by stages, as well as break them down by regions or supplier trees.

6. The Supplier Sustainability Management module is one of their latest modules focussed on tracking and managing an organization’s sustainability initiatives. It can track all of the emissions for each supplier, those that are reporting, the associated spend, and any other GHG data of relevance to the organization. It can also track all of the data associated with ESG surveys requested by the organization, which can be custom created and as broad or deep as required.

7A. The Program Layer is the toolkit that they use to build custom cross-platform program management capability that allows an organization to tackle new, and possibly exciting, initiatives that can transform their operations, product, and / or supply chains. Programs consist of suppliers, goals and targets, indicator metrics, associated data and reporting, summary dashboards, and scores.

7B: Decarbonization as a service is the first offering from Vizibl built on the program layer that integrates all of the platform capabilities to track scope 3 carbon across the supply chain by extending the sustainability management module to focus on the import and calculation of carbon emissions by supplier over time as well as best practices and learnings that can be shared with a supplier to help them reduce their emissions through leaner production, cleaner energy sources, new production processes, etc.

When it comes to the administration of the Vizibl platform, an administrator can configure, more-or-less, everything. First of all, they can configure the organizational tree as needed to match their organizational structure and include subsidiaries and use a variable number of levels for each organizational branch. So, the organization can have the global holding company; American, European and Asian holding company subsidiaries; individual (holding) companies for each country it operates in; and, if necessary, breakdown into individual locations or divisions if needed for management purposes. You can have five levels in Asia, four levels in Europe, and three levels in the Americas if that’s what’s necessary to exactly match the organizational structure. And of course, each company node in the organizational tree can have its unique settings, inheriting from the node above anything that does not need to be changed.

Similarly, because a company is a company in the system, full supplier organizational structures can also be modelled according to their company structure and modelled down to the individual (factory) location. This is particularly important since a diversity initiative may be global but improvement efforts might be restricted to one factory producing one particularly unique component for one product line.

Then, the organization can configure, for that company:

Account Plans
for each supplier, the company can define the strategic objectives, guiding principles, and target behaviours; these can be defined from scratch or added from a common library
Data Imports
to define regular / repeating file-based imports
Initiatives & Opportunities
the overarching initiatives and/or opportunities being sought, the plans and project stages, questionnaires, suppliers, etc.; the form builder is section based, supports all standard HTML objects, and all of the (numeric) data collected can be subjected to metrics and rules (to map to binary/integer) which can be defined on multiple choices
Performance
allows a user to define the performance metrics / KPIs, organized into categories, that are to be tracked, define what levels they are tracked at / rolled up to, and even customize the metric calculation in individual nodes
Permissions
define the user permissions (by role)
Projects
centralizes the organizational projects
Relationships
define the supplier relationships by mapping the supplier to the specific nodes in the organizational structure where the relationship exists as well as the segment (division/category) they are servicing
Reports
define and customize the reports
Statuses
define the project states for initiatives and opportunities, rejections, suppliers, etc. as needed to match the organizational process; can start with defaults
Surveys
encapsulates all of the surveys that can be reused across initiatives and opportunities
Tags
custom tags for tagging initiatives, opportunities, suppliers, etc. for quick search & filter
User Management
define the organizational users
Value Trackers
defines, and centralizes, the metrics that will be used in the innovations, opportunities, and performance tracking

In summary, the administration is very powerful … in fact, it’s one of the few solutions where the organizational structure for all companies (buying and supplying organizations) is extensively customizable, where initiatives can be tailored to the subset of relevant relationships and locations, where the inheritance for an initiative can be customized, and where you fully customize and localize all supplier interactions to just the organizations and teams that you need.

This is the first aspect of Vizibl that truly makes it stand out. The degree of customization of initiatives only to the relationships of relevance, teams of relevance, with metrics of relevance is far beyond what most of the traditional “Relationship” solutions actually offer.

The second aspect of Vizibl that makes it stand out is the new program layer they’ve built to support the creation of programs that tie together all of the relevant SXM capabilities needed to completely manage an organizational initiative across the supply base. In many platforms, the organization needs to manage the surveys, performance metrics, reports, projects, collaborations separately across the different modules of the platform that were built up over time.

The third aspect of Vizibl that makes it stand out is the new Decarbonation-as-a-Service offering built on this program layer that integrates all of the platform capabilities to track carbon down to scope 3 across the supply chain, provide insight into best practices and learnings to reduce emissions, allow for the creation of projects and initiatives to tackle the opportunities, track improvement over time, and essentially turn measurement into action into improvement. Carbon calculators are a dime-a-dozen from everyone and their dog, and can be built in 15 minutes in any good modern (spend) analytics platform, but few platforms do real monitoring, few platforms allow for the creation of supplier development projects, and fewer still provide real insight into what can be done to get results.

In other words, if you really care about the “R” in Supplier Relationship Management, and truly want to manage that relationship for true supplier development and improvement, you should definitely make sure Vizibl is on your short-list.