Category Archives: Market Intelligence

Is This The Year Austin Tetra Breaks Out?

Austin Tetra has been relatively silent since their acquisition by Equifax a little over a year ago. And it’s not because Equifax is in a hurry to dissolve the name (unlike D&B who appear to be trying to dissolve the Open Ratings brand as soon as possible), but because they want their new division to be well prepared with a solid offering for the B2B and B2C communities before they re-launch the service offering.

the doctor had a chance to catch up with the business leaders of Austin Tetra, Equifax’s commercial business unit, last month and it sounds like they have been making a lot of progress over the last year. They’ve been busy helping Equifax build a unique global identification system that will compete against the as-to-now relatively unchallenged DUNS # of D&B and Austin Tetra has been making good progress integrating the US, Latin America, European, and other global databases in Equifax’s arsenal into one universal database with one universal classification scheme – a task they expect to complete in the first part of this year.

They’ve also been making great strides in their service offering that pulls business and consumer data together for businesses that need to deal with small businesses on a regular basis and need to determine the risk, especially where the financial stability of the business often comes down to the financial stability of the owner. They can now, for a given small business, pull together the credit history of not only the business, but the owners as well and give you a combined risk or credit score where they have the data integrated.

They’ve also been making strides in compiling their supplier master and customer master databases where, for any given business, they can give you its performance history both as a supplier and as a buyer, as well as their employee master, where they can tell you how much the individual earned at his or her last job if his or her previous employer submitted information to the TALX database (another recent Equifax acquisition) – which has income, salary, and compensation information on approximately 150 M employees in the US.

They’ve also made great strides in their balanced scores, which aren’t just about diversity anymore. Their blended financial / risk scores now take all of the following information into account:

  • public filings (which they monitor and append regularly)
  • denied / debarred party tracking
  • blended score on individual & business credit history for small, private, businesses
  • customer credit risk based on past payment trends
  • diversity information
  • predictive supplier business failure score
    the chance of failure over the next 12 months using all available information

In addition, they’ve been extending their web services platform to make the data instantly available through customers’ current platforms and their current customers are now able to access all this data through multiple platforms that include Oracle, Siebel, and SAP.

In other words, now that they have the support of a 20B business behind them, they’ve been making great strides. However, given that they still believe in the “crawl-walk-run” philosophy when it comes to development and release cycles, they believe that it will likely be the middle of the year before everything is complete and tested (by current customers) to their liking, and hence likely the summer or fall before they attempt to make a big media splash. But that doesn’t mean that, if these are the types of solutions that you need, that you can’t start talking to, and evaluating, them now – or that, if these are the types of solutions that you might need down the road, you can’t keep a watchful eye out to see what they announce this year. Regardless of what happens, now that D&B is about to have a major competitor, I bet you’ll see a lot more innovation in this space over the next few years as the new contender in the space begins its fight for dominance – and that’s a good thing.

Supply Management in the Decade Ahead [2008] (Collected Links)

the doctor Takes His Turn With the (Supply Management) Magic 8-Ball – Part II

As I said yesterday, everywhere you look, someone is summarizing the best of 2007 or making their predictions about the forthcoming year on a technology-by-technology or vendor-by-vendor basis. However, since the nature of futurism is that it’s virtually impossible to get the micro-level details correct, I’m instead asking the Magic 8-Ball what’s in store for a dozen vendors in the year ahead. I’ll continue to indicate whether or not I agree, but remind you that these will just be the doctor‘s best guesses. The only true way to see what the future holds is to wait for it to be revealed.

Enporion
Question: Is this the year Enporion breaks out of the utility space with their e-Procurement offering?
 8-ball : As I see it, yes
Question: Will they get more than a handful of new customers outside of the utility space?
 8-ball : Ask again later
Question: Is this the year Enporion innovates a new solution that will finally grab them some attention?
 8-ball : Signs point to yes

I think, desperate for a solution that has actually been developed or improved upon in the past year, those companies not ready to adopt an open source solution like Coupa but that still want a new e-Procurement solution will finally take a closer look at Enporion. However, they have a history of being associated with the utility space, so unless they make a concerted, focussed effort to show that they have expanded beyond that space, it could take a while before potential customers see them as a general purpose procurement provider. As for innovation – this could be their year. They’ve been developing all their solutions in house for years, have adopted a process-driven visual model development platform solution that allows for rapid application development (once the platform is sufficiently mastered), and they have been working with some pretty big customers to try and develop fresh new applications. They’re definitely another company to add to the watch list.

i2
Question: Is this the year i2 breaks back into the sourcing scene?
 8-ball : Reply hazy, try again
Question: Is there new AGILE platform strategy a good move?
 8-ball : Most likely

The fate of i2 is another toughie. We’re certainly well beyond the point where any company is going to spend millions of dollars on a multi-year engagement on the promise of a big payoff in the future when they’re hemorrhaging cash today. Thus, an AGILE strategy where a company can start small on a six figure budget to attack their biggest problems first is certainly going to make i2 more attractive to the marketplace. Plus, even though i2 can’t make them public (or at least can’t make them public, yet), I know they’ve gotten a couple of big wins under their belt in the past year and that they’re definitely ready to play in the manufacturing and industrial sectors.

Iasta
Question: Now that Ariba has taken out Procuri, is this Iasta’s year to shine?
 8-ball : It is decidedly so
Question: Will Iasta continue to develop new offerings, as they did this year with Strategic Sourcing Decision Optimization?
 8-ball : Without a Doubt
Question: Will they become a serious competitor to Ariba and Emptoris?
 8-ball : Better not tell you now

Iasta has been essentially doubling its customer base and revenues for six years, offering new functionality every year since its inception, and has recently advanced beyond just being another suite vendor to a suite vendor with innovative best of breed offerings in two key areas – spend analysis and decision optimization. Plus, rumor has it they are tackling even harder problems in their efforts to become a truly innovative player in the space.

MFG.com
Question: Will MFG.com get the growth they’re seeking in 2008?
 8-ball : Concentrate and ask again
Question: Will the Sourcing Parts Acquisition Pay off this year?
 8-ball : Most likely
Question: Will they breakout among companies looking to improve their China sourcing operations?
 8-ball : As I see it, yes

Let’s face it – new supplier discovery is hard, but a trustworthy service that has detailed information on potential suppliers along with buyer ratings can make it easier. This alone should insure that MFG.com continues to grow. As for whether or not any new innovations from MFG.com will help them, that’s a good question. Even though its free for buyers, there’s a big difference between a basic free sourcing solution and a best-of-breed enterprise solution. Although the free tools may help smaller companies, its likely that they won’t be enough for larger buyers.

Oracle
Question: Will they ever get Fusion, now delayed until 2009, working?
 8-ball : Outlook not so good
Question: Will they have a competitive sourcing / procurement offering in the next two years?
 8-ball : Don’t count on it

I think the magic 8-ball is pretty close here. I don’t think they’ll have a competitive sourcing or procurement application this decade, but given the resources at their disposal, there’s a good chance they’ll eventually get Fusion working. I just wouldn’t count on it – and I definitely wouldn’t buy on promises alone.

SAP
Question: Will SAP pull it together this year?
 8-ball : Very doubtful
Question: Before the decade is over?
 8-ball : Cannot predict now
Question: Will they at least put some effort into updating and maintaining Frictionless until they pull SAP SRM together?
 8-ball : My sources say no.

The magic 8-ball might be on a streak here. SAP is another slow moving behemoth that is not likely to turn on a dime, or even the large hadron collider. It will likely be quite a while before they have a best of breed solution.

Vinimaya
Question: Is the Vinimaya Network the future of Supplier Networks?
 8-ball : It is decidedly so
Question: Is this the year they breakout?
 8-ball : Reply hazy, try again

Vinimaya is a very innovative and progressive solution when compared to many of the other supplier networks out there. As such, they face the same issues BIQ is facing – a market that might not be ready to accept that there might be much better solutions than the solutions they are using today and give Vinimaya an honest evaluation. However, when the time comes that the majority of the market is ready to accept a next generation supplier network, it’s very likely that Vinimaya will be a major player.

the doctor Takes His Turn With the (Supply Management) Magic 8-Ball – Part I

Everywhere you look, someone is summarizing the best of 2007 or making their predictions about the forthcoming year on a technology-by-technology or vendor-by-vendor basis. However, since the nature of futurism is that it’s virtually impossible to get the micro-level details correct, I’ll instead ask the Magic 8-Ball what’s in store for a bakers dozen of vendors in the year ahead. I’ll also indicate whether or not I agree, but point out that these will just be the doctor‘s best guesses – not statements of fact.

Aravo
Question: Will Aravo finally hit its groove with its new Sustainability Program Management Platform?
 8-ball : Signs point to yes
Question: What about their new blog – 2Sustain?
 8-ball : Outlook Not So Good

Aravo has a good supplier information management solution and a good sustainability management solution with its ability to manage massive amounts of data on a web-based platform where all data can be maintained through a centralized interface that allows each relevant party to maintain its own data. They certainly deserve to take off, either on their own or through a strategic merger or acquisition, but its hard to say when, or how, that will happen. As for the blog, due to the lack of regular posting, I don’t think it will be a big hit – but it will be a good tool to get the message out about what Aravo is trying to accomplish to potential customers.

Ariba
Question: Is this the year Ariba gets innovative?
 8-ball : Very doubtful
Question: Will they successfully integrate the best of Procuri?
 8-ball : Better not tell you now
Question: Will they at least support Procuri through 2009?
 8-ball : Don’t count on it

So, does the 8-ball have it right? Maybe. As far as the doctor is concerned, Ariba hasn’t been truly innovative in a long time, and even though Procuri had innovation in them, it’s a reality that most acquisitions usually result in the loss of a substantial amount of the innovative talent in the company being acquired, even if the acquiring company tries to keep them. Furthermore, even if they do support Procuri for longer than everyone is expecting, it’s probably safe to say that the integration of the best features of one platform into the other will take longer than predicted, since that is the industry norm. But regardless of what happens, you can be sure they’ll be putting out press releases at least every other week and getting lots of media attention.

BIQ
Question: Is this the year that people finally understand the difference between static reporting on data warehouses and true spend analysis?
 8-ball : Concentrate and ask again
Question: If it is, will BIQ finally break into the limelight?
 8-ball : Yes – definitely
Question: If it isn’t, will BIQ still continue steady growth?
 8-ball : You may rely on it
Question: Will BIQ continue to innovate in spend analysis?
 8-ball : It is certain
Question: Will BIQ finally get the media / analyst attention it deserves?
 8-ball : Outlook not so good.

I hate to say it, but I think the 8-ball is on one heck of a roll. BIQ is likely to keep innovating, likely to be one of the few companies that actually understands what spend analysis is, and one of the few companies that actually offers a real spend analysis solution. However, it’s also likely that, thanks to the confusing B.S. being spread by most of the vendors in the space, that this will not be the year where the average buyer realizes what the difference is between static reporting on data warehouses and true spend analysis (despite my efforts). It’s also likely that the media and so-called analysts will continue to ignore BIQ in favor of the larger vendors with the larger marketing budgets. However, once someone sees their solution, I predict that, at least in the indirect space, they’ll win more deals than they lose and continue to grow.

Co-exprise
Question: Now that Co-exprise has started promoting its new solution, are buyers going to accept it?
 8-ball : Most likely
Question: Will the next release contain all of the key requirements of spend analysis for direct sourcing?
 8-ball : Signs point to yes

I’ve reviewed the Co-exprise platform twice – and I’m impressed with what they’ve been able to do in a relatively short time. They don’t show any signs of slowing down on the development front, so it’s more likely than not that they’ll continue to innovate and achieve the goals they’ve laid out. Also, due to the lack of integrated PLM and sourcing solutions in the direct sourcing space, I think many buyers are starving for options (since the only other option for some of these companies is Siemens PLM – which was the UGS / e-Breviate solution), and that a fair number will accept it – or at least give it a shot.

Emptoris
Question: Is this the year that Emptoris gets innovative?
 8-ball : Concentrate and ask again
Question: Is this the year that Emptoris makes another acquisition?
 8-ball : Reply hazy, try again
Question: Is Emptoris going to go public this year?
 8-ball : Signs point to yes
Question: Any chance that they’ll succeed in luring away droves of Ariba / Procuri customers and possibly become the number one player in the next year or two?
 8-ball : Cannot predict now

Well that’s a pretty non-commital 8-ball – but it’s probably right. With Emptoris, you just never know.

The 12 Days of X-emplification: Day 8 – Market Intelligence

Market Intelligence is defined as information relevant to a company’s markets, gathered and analyzed specifically for the purpose of accurate and confident decision making in determining market opportunity, market penetration strategy, and new market development metrics on Wikipedia. For our purposes, it is essentially the information you need to make the right buy from the right supplier at the right time.

Before we get to the questions, I should point out that as we move away from technology into services, the number of questions with one right answer drop dramatically and it boils down to not whether the answer is right, but whether the answer is right for you. Thus, before you select a service, it’s important to know what you need so you will be able to properly identify what it is that you are looking for.

1. Does the firm undertake its own benchmarking – and how extensive is it?

Benchmarking is defined by Wikipedia as a process in which an organization evaluates various aspects of a set of processes in relation to best practice, usually within their own sector. In the context of a market intelligence firm, benchmarking is the process of not only tracking changes in raw material prices, but also tracking how well your projections have tracked over time. This allows the firm to continually improve their data collection and forecasting methods, which in turn allows them to continue to provide you with better intelligence over time.

If the market intelligence firm isn’t benchmarking their performance over time, then what value is their data providing you versus projections you can read in your average industry publication?

2. Does the firm track supplier financial performance over time?

You don’t just want intelligence on the raw materials and components that you buy, you also want intelligence on the suppliers that provide them. You don’t want to award a contract to a new supplier only to find that they go out of business three months later. Nor do you want to continuing doing business with a supplier when their performance is dropping.

3. Does the firm have commodity and category specific intelligence?

If you’re just looking for current pricing trends, then any data source will do. But if you’re looking for an understanding of why those trends came about, whether or not they’re likely to persist, and what changes in the marketplace could bring about a rapid change, you need to go to experts. Furthermore, if you’re basing your sourcing decisions on key categories on this intelligence, you better make sure you have the best.

4. Does the firm keep track of changes in industry regulations, supply, and demand that could cause all of their projections to be considerably off? And provide me with that data on a timely basis?

You’re looking for intelligence that tells you not only how things are, but how they are expected to be, at least in the short term. These projections are going to be based on certain assumptions. If changes in the industry or environment nullify those assumptions, chances are prices are going to change – maybe even dramatically. You want a market intelligence firm that tracks all of the relevant industry regulations, environmental conditions, and supply availability information and notifies you if something changes so that you can re-analyze the situation and, if necessary, take appropriate action.

5. Does the firm have models that break down cost components and explain discrepancies?

If the price of a commodity increases by 5%, there’s a reason. Typically, it’s because either the costs of one or more component raw materials have increased, or the cost of labor has increased. Without appropriate cost models, the firm supplying the market intelligence will not be able to explain why. Furthermore, you will not be able to model what the impact is of copper going up 5% if you don’t know how much the cost of copper is contributing to each of the commodities that you buy.

6. What types of information is included? Pricing Trends? Market Trends? Best Practices?

Most market intelligence will include pricing trends. However, in order for you to make good sourcing decisions, you also need to be aware of significant market trends. But if you really want to get the most from your market intelligence firm, you also want them to report on best practices being employed throughout the industry that you can use to improve your sourcing efforts.

7. How current is the intelligence?

In order for the intelligence to be useful, it has to be recent. If you’re engaging a market intelligence firm to help you track prices and trends on raw materials, commodities, and services that are critical to your organization, you want to know that the firm is redoing their category and commodity reports at least yearly, providing market updates at least quarterly, sending you important alerts at least monthly, and tracking relevant data daily.

8. Which audience is the intelligence focussed on? Corporate Research? Financial Analysts? Sourcing Professionals?

Although all types of market intelligence is important, as a sourcing professional you need intelligence relevant to you. Make sure the reports that the firm produces are for sourcing professionals first and research analysts second.

9. Is raw data access available?

Maybe a report includes the analyses you want to see, and maybe it doesn’t. But if you can access the raw data and the cost models, you can do your own forecasting and analyses based on different what-if scenarios and see how much a potential award could save you, or cost you, if certain changes happened in the marketplace.

10. Does the provider offer custom research?

Most market research firms have a set of raw material, commodity, and service categories that they track by default. Although these raw material, commodity, and service categories may be sufficient for your initial needs, the situation could change in the future. Unless you want to build relationships with multiple market intelligence firms, and pay the premium that is associated with retaining multiple firms, you might want to select a firm up-front that will produce custom research on an as-needed basis.