Category Archives: Supplier Information Management

Quell Your Lower Mid Market Buying Frustration with Novo-K BuyingStation!

Lower Mid-Market companies have a lot of problems modernizing their procurement practice. These include, but are not limited to:

  1. small procurement teams
  2. low budget
  3. lack of modern knowledge of best practices and tool sets
  4. few solutions that meet a. to c. on the market

This is the situation that Novo-K discovered when they started their managed procurement service offering a decade ago. Looking for tools that would support them in supporting their clients in a service-to-self-serve model (as they believe in enabling and training you to be more self sufficient as time goes on), they couldn’t find any that:

  • met the core 80/20 needs of their target market
  • came with an easy-to-use UX and built-in workflow
  • tackled tail spend effectively
  • was affordable for their customers

And having covered this space for 19 years, the doctor can confirm that when they started looking, this was more-of-less the case since:

  • most of the suites are over-engineered for the lower mid-market (LMM: £150M to £500M)
  • many could be configured, but the workflow wasn’t always simple out of the box, and UX varied
  • to this day, only a handful of providers have focussed on tail spend
  • most providers were priced out of the LMM range, and those that weren’t got scooped up in the M&A mania in the mid-to-late 2010s

but most importantly,

  • none (at the time) were really built to power a consultancy or MSP to serve it’s LMM customers in a service-to-self-serve model (where, over time, the customer would do more and more for themselves, only using the MSP on high-value/critical projects where it needed expertise or extra manpower or occasional strategic spend/category analysis projects)

So, after digging and digging and coming up empty (as most of the mines were at the point in time they were looking), they decided to build their own solution for the mid-market growth companies they focus on. They started by prototyping the workflows on Sharepoint, proved out the value proposition with their clients, then rebuilt a solid, modern, SaaS solution on AWS (which is SOC-2 compliant, G-Cloud approved, and currently going through ISO 27001 certification) [in the EU West Data Center 2 in the UK].

While the solution is new, it’s a really good Source-to-Contract solution for their target market, and especially so when you consider the price point is only £649 a month for most LMM procurement departments (as you can have up to 50 users at that price), can fit on a P-Card, and allows their Procurement department to manage all of their tendering processes for less than £8K a year! (And when it comes to saving, 80% often comes just from doing proper processes.)

So what does the solution do:

  • requests
  • project pipeline
  • quoting and tendering (RFQ)
  • supplier (information) management (and some supplier discovery)
  • contract management
  • savings tracker
  • administration

Requests

The platform is organized into a typical Procurement Project Workflow which starts off in an average (Lower) Mid-Market organization with a requisition from an organizational employee who needs to buy something. When the requisition enters the system, it is then routed to the appropriate budget owner(s) and approval queue for review and approval. If approved, it kicks off a project which is used to manage the source-to-contract process in the system.

Project Pipeline

Projects in the BuyingStation system go through the following standard workflow:

  • (approved) request
  • sourcing
  • selection
  • signing
  • supervision
  • document management (ongoing)

When a request is approved, it kicks off the project which captures all of the relevant information about the request (owner, budget [type], categories, need by date and/or sourcing timeframe, etc.) which can be used to inform later stages. Standard fields are pre-configured from the request, but more can be added to the request on a self-serve basis by the organization.

Quoting & Tendering

In the sourcing phase, the buyer defines the sourcing details, which will include, but not be limited to all of the standard definition fields (as the organization can define any additional fields that they need); uploads, or selects from the library, the terms and conditions, any required product or service specification documents, the pricing matrix and, optionally, the evaluation matrix (and indicates whether or not that will be shared with the supplier), and then selects the suppliers who will receive the quote requests (which have to be part of their organizational supply base — more on this later).

Sourcing Project Specification is the one place they currently use Gen-AI LLMs, and its specifically used for creating draft natural language project specification documents in standard formats using the sourcing event type (product or service), specific categories (and items) being sourced, project metadata, and other key elements of interest (which will be included in the prompt). Since they have no clue what you will source, their LLM training has focussed heavy on proper structure, core requirements, and high-level category specifics, and they expect their clients to use what is generated as a starting draft (that should only need a bit of editing for most standard products and services), and not a final document.

Once the sourcing specifications are complete, the quotation/tendering phase can be launched, and then requests are sent to the suppliers for completion. The suppliers get an email with link that takes them straight to the supplier portal where all they have to do is enter their password and they can upload their quotes and specifications. (As we’ll discuss later, chances are they already have their password setup as they would have completed their one-click registration when they were onboarded.)

Once the quotations are returned, the buyer can click into each and review them one by one. Note that, as of now, there is no in-platform support for viewing the Excel file responses, nor is there any support for the evaluation matrices, which will have to be completed and uploaded by the buyer once all of the quotations are reviewed.

Supplier Information Management

Backing up, when the user selects the suppliers, they select them from “My Suppliers” that tracks all of the organization’s suppliers and their current state of (un)approved and (un) contracted which lets the organization know where the supplier is in its onboarding, validation, and selection lifecycle. An unapproved supplier cannot be invited to quotations. An approved supplier is one that can be considered for business, but is one that hasn’t been selected if still un-contracted. (And, thus, an approved contracted supplier is one that has been approved and awarded business.)

Every supplier has standard corporate and administration details (which can be augmented as desired by the buying organization), a set of minimum information requirements for doing business (which can include, but not be limited to: credit information, data protection office, insurance, and baseline regulatory requirements) reference information, RASA* (optional, but an enhanced profile that can capture supply chain policies/considerations, cybersecurity & data privacy, conflict minerals, DEI [remember, they are UK and serve primarily UK and EU right now], IP policy and protection, and, very important, AI and Automation), associated projects, and associated contracts.

In addition to this standard supplier information management module, they also have a supplier directory that consists of baseline corporate profile information of every supplier who has registered in the portal, which allows a buyer to find potential suppliers based on standard filters of location and category.

Contract Management

The platform supports a basic contract repository that indexes all of the organization’s contracts with standard, user-defined, meta-data. While they don’t include AI for auto meta-data extraction, note that if you associate a contract with a project, a lot of the meta-data can be pulled in from the project to start you off. (They don’t deploy AI to auto-extract meta-data since their tests of the low-cost options, and remember this is very low-cost suite, found that accuracy for some contract types / older documents can be as low as 30% to 40% for many fields, with average performance around 70% at best. And while you will see that some of the larger vendors will quote accuracy rates of 80% to 90%, and that a few of these claims exist, this is not low-cost off the shelf third-party tech getting these results consistently — it’s highly specialized, and still expensive, tech.) Moreover, the metadata can also be uploaded from an Excel spreadsheet if that’s easier. (And when you’re only tracking a few dozen or so fields, do you really need overpriced AI? Might take you 15 minutes to enter it if you have your mallards in a row.)

Thus, once a supplier (or suppliers) is (are) selected for an award, and once the contract has been inked, it can be uploaded to the contract repository and associated with the project.

Savings Tracker

The platform also supports a savings tracker that allows the savings for each project to be tracked over time. However, since it’s a Source-to-Contract platform, it doesn’t do any automatic tracking as it doesn’t have access to historical, current, or future spend data in the procurement system, data store, or spend analysis system, and the user has to enter the historical price, negotiated price, and, on a regular basis, monthly or quarterly spend from the AP system. It requires some diligence, but seeing results quarter over quarter, if not month over month, is worth it and shows a mid-sized organization the value of a good sourcing process in the hands of an appropriately (platform-) powered Procurement team (trying to get budget and sufficient headcount to transform the buying, and savings, power of the organization).

Administration

Administration focusses on three capabilities:

  • system settings
  • user roles
  • forms

System settings are standard system settings such as language, currency and other financial settings, finance system redirection (email or link) if a buyer wants to kick off a PO, supplier directory settings, email account (for supplier communications), and whether or not the AI feature is on or off.

Security and access in the platform is roles-based, and the buying organization, on BuyingStation acquisition, will define (or customize) the (default) user roles (of Admin, Procurement Lead, Procurement [Buyer], Legal, Operations, IT, Legal, HR, and Marketing), and lock down user access by module and permission level. One unique characteristic of the system is that if a user doesn’t have any access to a part of a platform, they are not simply locked out (often by way of a greyed-out menu item), they are restricted from even seeing an interface that would indicate its existence. Unavailable functions don’t show up on the menu or in any part of the application they access.

Dashboard

Like most modern systems, the user logs in to a summary dashboard which not only summarizes expected vs. delivered savings year to date, but also statistics on project status, supplier status, contract status, and upcoming expirations.

Summary

It captures the majority of the process the average growth-focussed (lower) mid market organization needs (closer to a 90/10 than an 80/20, and really isn’t missing that much besides the ability to view quotes (side-by-side) and evaluation matrices in the platform (vs. having to go into Excel), so we can confidently say it’s a great solution for the price (which any organization can put on a P-Card). The two other things you need to note that it’s currently missing are:

  • an Open API to integrate to your Finance system (which is being developed now to support the out-of-the-box integrations they are planning for late this year/early next year that will allow you to push POs directly into your standard platform [like NetSuite] and even pull in basic invoice data) and pull in data for tracking and spend analysis (but at least this is coming at some point)
  • integrated spend analysis to help you identify what you should be sourcing, but this is an easy fix too — just buy a few Spendata classic licenses for your power buyers/analysts at $699 a year (as most mid-sized organizations won’t have data sets beyond 5M records, need local installations, or other enterprise capabilities when there will just be a few users) — and since Novo-K offers spend data cleansing and initial spend cube construction and analysis, they can jump start you on the right cube to start your sourcing and spend analysis journey

Now, of course, since the full commercial release of this new platform is only a year old and since it was designed to be low cost (and help Novo-K provide you with a platform that you can eventually use yourself after they start you off on your Strategic Procurement journey), there are lots of improvements that could be made, but not many are needed for you to start seeing ridiculous value from a low-cost solution that puts a best practice process (which is the ultimate key to savings) in the hands of your Growth-Focussed Procurement team that, to date, probably only has email, Excel, and a buying guide from 20 years ago. So, if you’re a lower mid-market still running off of email and Excel alone, we would suggest you look at BuyingStation today.

* Risk Aassurance of Supply, Assessment

Wham Up Your Direct Sourcing with EffiGO!

EffiGO might not be a name you know, as they spent the first decade building, deploying, and growing primarily in India (where they have over 150 enterprise customers including some of the largest names in India in Construction, Manufacturing, CPG, Automotive, IT, Pharma, and Chemicals and have sourced and procured over 25 Billion in Spend), but they now have a growing presence across Asia, the Middle East, and are just starting to expand into Europe (with America coming soon).

However, it now is a name you should know because they built the system from the ground-up to be a complete purchase requisition to invoice approval system with all of the key sourcing and procurement steps in between for indirect (and tail spend), direct, rate-card based services AND complex (project) procurements for their customers — whatever their customers needed. And the foundational “plan to pay” from purchase requisition to ok-to-pay suite can be obtained by a LMM or SE (Large MidMarket/Small Enterprise) at an annual license cost starting at 100K. Integrations, and they highly recommend integrating to the ERP (where they have integrated with most major ERPs multiple times including, but not limited to SAP, Oracle, Infor, Dynamics, etc.), custom configurations, and services are extra, as with any other major player, but the license cost makes it affordable for the mid-markets who need a direct/complete sourcing solution.

The core of the EffiGO platform is broken into two main modules that cover the two main work streams:

Plan to PO

The Plan to PO component consists of the creation/acceptance of the Purchase Requisitions (which can be pushed from the ERP or manually created in the platform), the creation and execution of the sourcing events, the selection of the award, and the definition of the contract that orders will be made against.

Once a Purchase Requisition is pulled in from the ERP or manually created by a user in another organizational department, the user will see it in EffiGO and can pull it up, see all the details, edit those details (including, but not limited to the goods and services requested, the units, the delivery dates requested, the payment terms, etc.) or request an edit if they don’t have the authority, and approve it for sourcing.

With respect to core sourcing, the platform supports:

  • RFX – Quick
  • RFX – Full (with or without TechnoCommercial Evaluation)
  • Auction
  • Reorder (from a past RFX created in the last quarter)
  • Order from Catalog (for products where [rate] contracts are in effect)

RFX (and auction) creation starts by selecting one or more approved requisitions to kick-off an RFX (or auction) process, selecting the event type, entering basic information (name, business unit, event owners, business unit, desired delivery locations, currency, etc.), and determining whether the event only requires commercial specifications and terms or detailed engineering/technical review and a weight-based award based on commercial terms and product/supplier review.

Note that the system will inform the buyer if one or more parts or items in one or more of the requisitions they select is either in inventory and/or already under contract and can just be fulfilled without going through a sourcing event.

Once the basic event criteria have been defined, and the items and quantities confirmed, the user is walked through the remaining configuration steps that include:

  • documentation – standard organizational terms and conditions, NDAs, and other project specific documents (which can be pulled in from a central library) or uploaded
  • price tables – the platform supports pre-configured bidding templates for different categories and products (that can be associated with any level of the product and service hierarchy they support), which can include non-price components, and the user just needs to select one
  • vendor selection – the buyer can search for vendors by group, category, location, etc. and add them one at a time or in groups
  • dates: clarification questions, bids, follow-ups (if requested), notifications, etc.
  • review criteria: techno only – select the template that will be used for product/services/vendor review and scoring

Note that since the requisitions can be pushed in by the ERP, they can range from a requisition for a single item to a requisition for a complete bill of materials, each item or part can be associated with its own cost breakdown table defined in the EffiGO platform, each part can have its own associated documents, including drawings and detailed product specifications, which can be included in the ERP push, pulled in from the EffiGO library, or even pulled in from a (n optional) PLM integration, and the cost tables can also include service cost rate tables as well. To make bidding easy for the suppliers, the bid sheets can be pulled down into Excel (and then re-uploaded), and that can be done on a product or event basis (and then the workbook will be multi-tab if different cost models are required for different parts and/or service rate cards).

If the sourcing event is being awarded on commercial terms only, then the application will select the lowest bids at the part, bundle (grouping), or RFQ level for award, and if the buyer approves, the award selection(s) can be output for offers, letters of intent, and contract negotiations, one per supplier. If the sourcing event is on commercial and technical, the commercial are auto-scored and the buyer scores the technical components, and then the award can be auto-computed in the application according to the award level.

Once a contract has been signed, it can be uploaded with all of the terms and conditions defined (and all meta-data from an associated event can be associated with the contract), and custom completion requirements can be specified in the meta-data to make sure that all POs go out with those requirements (and they are not forgotten — more on this in our discussion of the PO to Pay module).

PO to Pay

The PO to Pay component consists of the creation of the purchase orders, the management of the purchase order and assurance of contract terms and conditions, the management of associated communications (acknowledgements, change requests, ASNs, etc.), the acceptance of the invoices against the orders, the processing and approvals, and the creation of an ok-to-pay push notification to the payment system.

When a buyer is ready to place an order, the buyer can create a purchase order:

  • off of an RFQ
  • off of one or more catalog items which may or may not be under contract (but are approved for purchase)

As with sourcing, if the buyer selects an item that is already in inventory or under contract (and can be requisitioned without any approvals), the system will inform the buyer.

As with any other system, a purchase order consists of items, units, approved pricing, delivery locations, dates, and other key pieces of information. Unlike other systems, the buyer can specify a full host of requirements that must be met before the PO can be issued, acknowledged, and dispatched against which include, but are not limited to:

  • whether an Ack(nowledgement) is required
  • whether acceptance is mandatory
  • whether an ABG (Advanced Bank Guarantee) is required
  • whether a [C]PBG ([Contract] Performance Bank Guarantee) is required
  • whether a LC (Letter of Credit) is required
  • whether the vendor needs to submit any technical documentation
  • whether the requesting buyer needs to provide the vendor with any instructions or documents
  • whether stage monitoring is required (and what the stages are; these can be selected from pre-configured or PLM lists)
  • whether transportation is in the scope of the buyer or vendor
  • whether the vendor is required to submit dispatch instructions
  • other potential organizational specific requirements around purchase orders (for certain products, services, or categories)

When a vendor receives the purchase order, they also receive all of the associated documents and information provided by the buyer along with all the instructions they need to follow and requirements they need to meet to make a delivery AND get paid for it.

Once a vendor has dispatched (part of) a purchase order (which is also tracked against an RFQ to make sure that they never dispatch more units than they have been approved for), they can submit an invoice, which is associated with the order, which goes into an approval queue. Approval chains can be configured to be as simple, or complex, as needed, with as many steps as necessary.

Catalogs are buyer maintained. Suppliers can upload and submit catalogs to the buyer, but they don’t go live until approved by the buyer, who can accept or reject items and pricing. Once awards have been made and/or contracts have been signed after the issuance of a sourcing event, the buyers can create catalog items with the details and pricing, and mark them as under contract if a contract is signed or the rates are approved (if the supplier is willing to honour the quotes in the latter case).

Catalog items can have as many buyer standardized fields as needed to completely specify the item, which can be searched by type, category, supplier, location, status, and keywords against key fields. All items can be associated with their proper place in the organizational category hierarchy, which can be as deep as required. (Note that vendors can identify the categories they service up to Level 4 in their profile.)

Vendor Management

Required vendor information management is embedded throughout the process and is included with both of the core modules and includes vendor onboarding as well as ongoing information management, reviews, status updates (which can block on a category, unit, or organizational level), and insights (through the built-in reporting).

Vendors can be loaded from the ERP on implementation or created inside the platform. Vendor profiles in EffiGO consist of basic corporate details (type, corporate id, taxation registration, primary category, HQ, etc.), deep business details (registered and correspondence details, production locations, etc.), financial info, registration & certifications (statutory, documents, etc.), sustainability information, declarations, and audit log. Additional forms can be configured on implementation to capture any additional information that the buyer needs to track.

In addition, the buyer can maintain the vendor status and whether or not they are approved on a division, or even category basis. Unapproved vendors can be invited to events by an authorized user, but cannot be sent POs, or approved for payment.

Vendor Portal

A vendor has their own portal to interact with the buyers on the EffiGO platform. While they will get email notifications of every sourcing event, change, award, contract offer, purchase order, change, information request, etc., many actions will need to be taken through their portal (for which they will get a direct link to do so in the e-mail). This is because communications, acknowledgements, change requests, etc. need to be associated with the right event or purchase order, key documents need to be secure, and the organization needs to make sure invoices (with payment instructions) are not tampered with.

Summary

EffiGO is a very different kind of platform — one that was built to serve manufacturing clients in Construction, CPG, Automotive, IT, Pharma, and Chemicals from the ground up and one that ended up being a direct-focussed system that can also handle indirect, services, and complex project procurements as well! It’s a name you don’t know, but if you have a mix of direct, service, and indirect needs, one you should know — especially if you are based in EMEA where EffiGO is currently expanding to!

Technobug
Technobug
Technobug
Technobug

It puts the boom-boom into my heart (hoo-hoo)
It sends my soul sky-high
When the PR starts
Technobug into my brain (yeah, yeah)
Goes bang-bang-bang
‘Til my keys do the same

But something’s bugging me
Something ain’t right
My best friend told me
What he did last night
When I was sleeping in my bed
I was dreaming
But I should’ve been Sourcing instead

Wake me up for EffiGO-go
Don’t leave me hanging on like a yo-yo
Wake me up for EffiGO-go
I don’t wanna miss it when we hit that high
Wake me up for EffiGO-go
‘Cause I’m not planning on Sourcing solo
Wake me up for EffiGO-go
Lets get Sourcing tonight
I wanna hit that high, yeah yeah!

Features ARE NOT Applications; But Applications Require Features!

THE PROPHET recently asked What Procurement Tech Product Categories Were Really Just Features All Along? Which is a great question, except he cheated.

He cheated with the first 5!

  • Supplier performance management
  • Supplier quality management
  • Supplier information management / supplier master data management
  • Supplier diversity
  • Supplier risk management (not supply chain risk!)

We’ve known for years it should be one Supplier 360 solution! (Even though no one offers that when you consider all of the elements that should be there. Heck, none of them even offer the 10 basic CORNED QUIP requirements … in fact, good luck finding a solution that offers 5 of those requirements among the 100+ supplier management solutions).

He you cheated again with the next 3!

  • Should cost / cost modeling (for procurement, not design engineers)
  • RFX and reverse auctions (when not bundled with broader capabilities or services)
  • Sourcing optimization

We’ve also known for yours it should be cost-model and optimization backed sourcing (auction, RFX, hybrid, single source negotiation, etc.) … otherwise, it’s an incomplete solution. But only a fraction of the 80+ sourcing platforms offer true optimization (less than 10) and fewer still do extensive cost modelling. (Note that we are focussed on modelling, not cost estimation — that requires data, and that can, and probably should, be a third party data feed.)

And he was wrong on the last front.

Real Spend Analytics should be standalone. Wrapping restricts it! The modules you use should provide all the specific views you need, but the reason that spend analysis quickly becomes shelfware in most organizations today is the same reason it became shelfware 20 years ago … once you exhaust the limits of the interface its wrapped in, it becomes useless. Go back to the series Eric and I wrote 18 years ago (which you can since Sourcing Innovation didn’t delete everything more than a decade old when it had to change servers in 2024, unlike Spend Matters when it did its site upgrade in 2023).

But Very, Very right in that features are not applications!

And very, very right in that too many start-ups are launching today as features (which will only survive if acquired and rolled up into existing applications and platforms), and not solutions. While apps dominate the consumer world, in business there is not always an app for that, and, frankly, there shouldn’t be. This focus on point-based apps is ridiculous. It’s not features, it’s functions. It’s not apps, it’s platforms. It’s not orchestration (and definitely not spend orchestration), it’s ecosystems!

Recent stats, such as those published by Spendesk put the average number of apps a business uses at 371, with an average of 253 for SMBs and 473 for enterprise firms. WHAT. THE. F6CK? This is insane. How many departments does an average organization have? Less than 10. How many key functional areas? Less than 12. Often less than 10! How many core tasks in each function? Usually less than 6. That says, in the worst case, an enterprise might have 72 distinct critical tasks which might need their own application (but probably not). This says that SMBs have at least 3 times the app they should have, mid-size organizations at least 5 times, and enterprises at least 7 times. That is insane! No wonder there are so many carbon copy SaaS optimizers (as we covered in our piece on sacred cows), because if you have that many SaaS apps, you have features, not applications. And you need to replace sets of these with functional applications that solve your core problems.

(And if you want to know how to prevent app sprawl, before buying yet-another-app, ask yourself “is this supporting a function that should be done on its own, or just a task that should be part of an existing function” … if the latter, it’s a feature, not an application, and if the application it should be part of does not have an upgrade/module that supports the task, then you have the wrong application and it’s time to replace it, not pointlessly extend the ecosystem!)

If you want productive supplier bees, maybe you should get a Hive!

Last decade there was a lot of messaging around supplier information management, relationship management, and even supplier diversity management but not much about risk and compliance, as COVID hadn’t hit yet, and very little about supplier performance management, as most organizations were still struggling just to get a handle on who their (active) suppliers were. However, while there has been a lot of talk about the value of relationship management for two decades, the reality is that there is no value in just relationship management. All relationship management does is ensure that there is communication around issues, contracts, etc.

The value of an SXM system comes from an improvement, and that requires performance management if the value is limited due to poor performance; risk management if the lack of value is due to multiple disruptions over the course of the relationship; and compliance, if lack thereof is resulting in unsaleable goods or unusable services. However, there is no value from your supplier being happy with the relationship. They might be easier to work with, but what’s the dollar value of that? Zero. 0. Moreover, are they happy because you are a good customer or are they happy because they’re charging you extortion prices and you are paying them while being blissfully unaware? (Now, that’s not the supplier’s problem, as it was your sourcing team’s problem for not doing their market research, but, again, it’s not indicative that you have a good, valuable, relationship.)

Fortunately, there are a (select) few providers that offer performance management, and one in particular is SupplyHive, which, unlike many of it’s peers, ONLY does Supplier Performance Management (as that’s where they see the largest market need, and they can easily integrate with other systems for those organizations that want a more holistic supplier management solution). Founded five years ago by ex-CVM founders (who basically defined the SaaS-driven supplier diversity space before it was a thing), they now have 25 Fortune 1000 customers across multiple industries (including a number of really big names whose products you likely use or consume regularly). They have these customers because they not only support customizable performance analysis down to the supplier plant level or service level on a role or project basis, but can do holistic performance analysis across products, ESG, risk, compliance, personnel, and any other factor you want to consider and have the data for. (Which can come from existing systems they will integrate with, third party feeds, or supplier surveys … but it’s really best to use third party or measured, objective, data and keep the surveys for supplier 360 surveys where you ask your team to rate the more subjective aspects of the relationship and you ask the supplier to rate how well they think they are doing on more subjective factors, or metrics translated to a 1 to 100 percentage, and see how their view of performance differs from your organization’s.)

Furthermore, and this is not surprising if you are familiar with the niche supplier management specialists in the SXM space, the majority of their clients and prospects have (SAP) Ariba, Coupa, Jaggaer, or another major suite and not a single one of these use their supplier management modules (because, while it’s important to know who all your active suppliers are, and have this information in one common location, there is no value paying six figures a year for a supplier information database when you can literally get one for 99£ per user per month). The value comes in being able to do something with that data. (So you need to add risk modules, compliance modules, ESG modules, etc. etc. etc. This can greatly inflate a suite price, and often you only get last generation modules in many cases. (Remember that Ariba was built around Procurement. Coupa was built around Procurement and its next strongest modules are Advanced Sourcing [Trade Extensions acquisition], Spend Analysis [Spend360 acquistion], etc. Jaggaer, formally SciQuest, was built around Procurement and acquired a number of companies in the early days to flesh out its solution, and eventually BravoSolution for Spend Analysis and Sourcing [in Indirect, Services, Projects, etc.] and Pool4Tool for Direct Procurement. While many of these have fairly extensive SXM offerings if you buy all the modules, none of these started in SXM and definitely not in SPM/SUM.)

On the flip side, SupplyHive, which is a best-in-class information management solution (because you need information for performance), was built for performance. And it was built with four goals in mind, which they have now achieved:

  1. meaningful scores that convey (relative) supplier performance at a glance with drill down to raw data
  2. drillable performance scorecards that go right down to the individual plant, and project, level if you desire
  3. meaningful, AI-summarized, feedback and auto-generated reports that can be sent to the supplier as a basis for discussions
  4. embedded action plans, which are auto-suggested and can be kicked off automatically upon a score falling below a threshold or a supplier discussion

as they saw the following problems with every traditional SRM, solution, including those that had single-level survey “performance”

  1. a random score on a random scorecard is meaningless; the score needs to cover the representative dimensions across meaningful scorecards with appropriate weightings; and while a company may have the expertise to build a scorecard across some dimensions, they will need best practice guidance across others
  2. a high level score hides the truth; you’ll have exceptional plants/projects and dismal ones, but they will cancel out and you’ll be left with an average, which you will think signals all things fine [but it’s even worse than that, a score is not a score is not a score as there will always be differences by location, product, and project and unless you have all the data and all the details, you’ll never get the full picture of where there is the most opportunity for improvement, where there is the least, when a supplier is one you want to consider consolidating too, and when a supplier is one you want to take business away from until they get matters under control]
  3. while a scorecard may be meaningful to a buyer, except for the 360-view (which summarizes the gap between the supplier’s viewpoint on their performance versus the buyer), it’s not meaningful to the supplier — they need plain english and focus on key areas they need to improve
  4. just like relationship management doesn’t actually increase value, performance doesn’t increase value unless you do something to improve that performance

Thus, SupplyHive built a platform that has four main parts:

  • Your Hive (MyHive): which centralizes access to your (open) surveys, action plans, and scorecards
  • Suppliers: which centralizes access to your suppliers, their profiles, and the high-level matrix with the supplier’s hive score
  • Hive Analytics: where you can drill into supplier scorecards (by area), benchmarks, the Hive360° breakdown, and the quadrant view (which is good for sourcerers)
  • Configuration: the administration section that allows everything to be configured to the needs of the organization

Let’s start with your Suppliers.

SupplyHive has an Open API, so it is easy to pull suppliers from another system or push them in if your current supplier master has configurable API-driven pull or push capabilities. If not, or you don’t want to deal with IT or the implementation lag, it’s very easy to load the database of suppliers from a flat file (which all of your systems should be able to generate) and then do the integration later. (And, finally, for ongoing supplier maintenance, it does support new supplier profile creation through form-based entry like every SXM system on the market.)

The primary entry point in SupplyHive is the supplier matrix where you see a quick snapshot of your suppliers and their overall hive score; performance and relationship indexes; quality, value, customer service, and CSAT stores; as well as the number of (completed) project reviews and associated supplier spend (which needs to either be pulled in from the ERP/AP or manually entered).

The search tab allows you to search suppliers by name, location, or other detail in their profile. Selecting a supplier brings up their scorecard summary by default (as the platform is focussed on performance), which can be configured to include an overall AI generated summary or a customized performance dashboard, and from there you can click into the scores and drill into the Hive Analytics or drill into the supplier profile. The profile has everything you would expect out of the box including, but not limited to:

  • basic company details (including, but not limited to, categories, client accounts, divisions, regions, etc.)
  • location details
  • contracts & identified risks
  • diversity profile
  • digital QBRs
  • sustainability
  • safety
  • SRM framework
  • issue trackers
  • innovation hub

and if that’s not enough, the buying organization can add as many tabs as it wants (and hide or remove tabs it doesn’t) as well as adding as many fields as it wants to existing tabs) in the configuration section, where each tab can include as many standardized attributes (also defined in the configuration section) as desired.

Now let’s move onto the Hive Analytics, starting with the scorecards. Scorecards work as you would expect, they have a number of dimensions, scored on a scale (that can be converted to a quantitative number), that can be weighted to compute a total score. The default scale is out of 100, but any scale can be configured. The big difference with Hive Analytics is that they are not supplier level — they are fine grained down to the project at the plant / location level, and then rolled up to the plant / project, to the region, to the supplier (or to the plant, to the country, to the region, to the category, to the brand, to the supplier, etc. — depending on how granular the organization wants to measure performance). They are based on either survey data (filled out by organizational stakeholders, supplier stakeholders, or both) or imported third party risk/compliance/metric data (as the platform is not a risk, compliance, or [financial] metric platform).

Out of the box, the platform can be configured to include a number of survey templates for each industry and major category, but SupplyHive prefers to work with its clients on configuration to customize the templates based on the primary categories and projects the client is addressing in its initial performance projects, that start with the top 60% to 80% of spend and the top 10% to 20% of active suppliers.

In addition to scorecards, which are associated with a date, and which can be filled out by multiple individuals, there is a trend view that allows the organization to see how the supplier’s performance score changes over time.

As noted above, the platform supports Hive360° where the supplier can be invited to self-score, and then the platform will show the difference between the buyer score and the supplier score. It’s not just your view of performance that is important, it’s the supplier’s view. If the supplier believes they are performing a lot better than you think they are, then their performance review should likely take priority over others, especially if they are considered a strategic supplier while the other suppliers with a similar performance score are providing commodities or non-strategic products and services where you can live with mediocre performance (as long as the supplier recognizes that’s the level of performance they are providing you with).

Benchmarks allow you to compare supplier performance to an organizational defined baseline which can be based on average supplier performance for the category or industry or a snapshot of past supplier performance.

When it comes to action plans, they work as you would expect, with a bit of a twist. There are three ways to generate action plans:

  1. fully manual
  2. platform recommendation of existing templates (with titles, goals, and action steps) using the metrics, trends, and user feedback that can then be customized
  3. AI-generated from uploaded documents — which can include call transcripts, project specifications, issue documentation, etc. — context, and goals

In each instance, you can accept or modify the steps, define due dates and owners and approvers for each of the steps, launch it, and track the progress over time.

We’ll quickly mention the new innovation hub where buyers can issues challenges and suppliers can submit ideas, and which allows the buyers to manage those submissions through an intake to execute process that organizes ideas by category and type and tracks the status of each one.

Finally, the Quadrant View, which can be used to plot any two dimensions or supplier KPIs against each other, can be used to plot the (overall) supplier score by supplier spend (with drill down capability) to help those organizations identify high spend suppliers with low performance that may need immediate action relative to performance; or to identify high performance suppliers with low spend that an organization may want to move business to; or to identify low-performance low-spend supplies which could simply be eliminated from the organization’s supply base in an optimization project. (Optimization, not rationalization, as it’s not always the fewest suppliers, it’s the right number by region and category that deliver the right value and performance. The right number for a category could be 2 suppliers or it could be 22 suppliers.)

The most unique aspect of the performance application is the supplier performance summary which is not just a roll up of the scorecards, but an AI-generated supplier snapshot that includes an overall performance summary in plain english, suggested supplier action plans, the story behind each score (key issues in plain english), suggested action plans tailored to improving that sub-score, and a gap analysis on the Hive360°. The platform also allows the user to output a PDF report with all of the information to send to the supplier before a supplier performance review to help both parties get on the same page. Also, it’s single click for a buyer to kick off an action plan with a supplier with the goal of helping the supplier improve their performance.

In terms of the Roadmap, they are working on three major enhancements:

  • Anonymized Community Performance Direction Data: where they use anonymized community data to enhance common supplier profiles with directional performance data (to help buyers understand which suppliers are improving when doing discovery and which suppliers are not, or might be in trouble, when considering renewals)
  • Automated “Boost your Hive Score” Recommendations and action plans where they let a supplier know that if they can do actions / action plan X by date Y, it will increase their score for a buyer
  • Detailed Performance Insights where, going back to where the doctor said a score is not a score is not a score bubble up the best and worst performance across a supplier’s categories, locations, and projects and, over time, identify what a supplier is consistently good at (and improving) and not good (and worsening); for example, they did an analysis across one of the Big X consultancies and pretty much discovered something leading analysts in the space already know (but most won’t write about, but, as you know, the doctor, who told you NOT to hire a F6ckw@d from a Big X for an Analytics project, will), that the certain Big X consultancy in question only consistently performed well on:
    • high dollar projects (which get the attention of the few, talented, high paid team leaders)
    • quick hit projects (that they can complete quickly with the few high performing assets they have and then reassign the team to another overpriced project)

With respect to implementation, most of their customers are up and fully running on the platform in 30 to 60 days, which includes the creation/import of all starting supplier profiles, the selection and customization of attributes, scorecards, organizational categories and hierarchies, users, training, and initial project creation. Implementations that require IT or a third party might take longer, but if the connection points have Open APIs, those are typically configured in days.

So, if you are a larger organization where supplier performance is a serious concern, and an even more serious manual effort (where your team is breaking under spreadsheets), consider checking out SupplyHive at your earliest convenience. (Especially if your QBRs are taking an average of 45 days of prep time, as SupplyHive will reduce that to less than 5 days of prep time, a 90% savings! Most of their clients are currently seeing a 6X to 10X ROI from the manual effort reductions alone, which also allows them to put more than just the top 100 suppliers under management, with many organizations quickly progressing to 500 to 1000 suppliers under ongoing performance management and monitoring.)

Just like CVM took off over a decade ago, this next phase of specialized supplier management application is about to take off again because organizations need value from their suppliers, and relationship management alone is not enough. (You should consider checking them out sooner than later. Once the market realizes how critical supplier performance management is to cost management in the new age of supply chain cost unpredictability, given how few supplier performance management solutions are on the market, we expect that you’ll go from getting their attention to waiting in a queue.)

Get Verified Supplier Data with Veridion!

Veridion, founded as Soleadify (and still listed as such on Snowflake, Datarade, and Nomad Data), was founded to help companies access and maintain accurate and reliable data on their current and potential supply base. Like other supplier discovery / data companies, it is constantly crawling the web looking for suppliers, related news, and sentiment, but unlike some other supplier discovery / data companies, it doesn’t use third party data subscriptions and only includes verified B2B suppliers in its database.

Let’s drill into that last point as it is a differentiator between Veridion and some other supplier data / discovery providers.

  • First of all, it verifies every single supplier it includes is active in a(n open) government registry. Most countries in the world (with the exception of China) make all of their corporate registration databases globally available, and they use these databases as a foundation.
  • Second, key data points for that supplier are only retrieved from verified sources (including global corporate registries, the suppliers web site, once tied to a registration, or profile sites they are known to maintain on business and social networks).
  • Third, all key data points for every supplier in its database are verified on a weekly basis, ensuring that any critical corporate, financial, product, technology, service or ESG data field you pull from its database is at most a week old.
  • Fourth, for fields that can be / are estimated (like revenue, employee count, etc.), it will tag the field as such. (When explicit financial statements are not available, sophisticated modelling using benchmarks, industry comparisons, employee count, geographic location, publicized deals and associated revenue numbers, third party revenue estimates, etc. is deployed and tagged as such.)
  • Fifth, all source data it uses is cached for quick verification / full-text search for supplier discovery.
  • Sixth, it scrubs all B2C businesses that would never be a supplier. Many of it’s peers claim 2X, 3X, and even 5X the number of “vendor” records in their database, but they are not actually B2B vendors you would actually use as you need to remember that the coffee shop on the corner, the pizza joint on the next block, etc. are all registered businesses in the registry that these “supplier data” platforms suck in, but not suppliers you’d ever use! (And while a very small number of them might appear on the T&E registry, you don’t want these coming up in a supplier search you’re paying for, and you don’t need detailed data on them.) Veridion removes all of these B2C cafes, restaurants, grocery stores, retail stores, etc. etc. etc. from its database to ensure that searches bring back real business suppliers, not random entities. (And by limiting its database to just real B2B suppliers, it is able to validate all of the key data in its entire database every week!)
  • Seventh, it’s highly accurate. Most customers who use their supplier validation and enrichment services see a 90%+ match-rate with their current database. (One of their most recent projects saw a 97.2% match rate which included considerably more accurate Australian vendor mapping for a client whose last provider couldn’t identify almost 22,000 suppliers used by the business.)
  • Eighth, because of it’s validated data approach, it is able to maintain all parent/child/sibling relationships with high accuracy and give you a lot of corporate relationship insight into the supplier which might also include partners and resellers.

Moreover, all of this is available through the API. They are an API first company, as they expect to be plugged into your supplier management / ERP / sourcing platform for enrichment, validation, and discovery. (They are already plugged into Coupa, Exiger, Everstream, and Market Dojo and will likely be announcing more partners later in the year.)

That being said, they do have their own supplier discovery platform where you can do searches, preview results, refine, and then, when you are ready, accept, review, and export data for import into your sourcing platform(s) (or, if there’s a direct integration, push into those platforms). If you’ve been following SI, or keeping up with the supplier search and data market, you probably have a good idea how this works, but there’s one key difference between Veridion and other platforms that we want to drill into first — Preview.

When you do a search, which can be free text (and they will use semantic AI to parse your request) or a set of specified key requirements (location/proximity, product, size by employee base or revenue, NAICS, DEI, ESG, certification or other requirements expressible as keywords), it returns the results in preview mode which, in addition to telling you how many companies were identified, (provided you turn stats on) breaks down the geographical distribution, industry classification, tag frequency, supplier type (manufacturer, distributor, or services provider), and company size of the identified potential supply base in addition to giving you full details on the top two suppliers. At this point, you can accept the results and see the details on all of the suppliers or, if the stats look off or the top two matches don’t look anything like what you are searching for, revise the search or start a new one. It does this because it uses a consumption-based model where you only pay for the data you access, believes that you shouldn’t be charged for results you don’t want, and recognizes that, at least until you are familiar with the platform, it will take you a few tries to get the search right (as it typically does even when you use Google). Moreover, it knows that if you’re never going to send an RFQ to more than 10 suppliers, you probably don’t need to research more than the top 20 to 30 suppliers if you get a good match rate, so you don’t want a 300+ data set as a result, and want to refine that down until you have a high probability of good matches (and then if the number is still too high, you can simply just select the top X results).

We need to break down the search capability, but to do that, we need to breakdown the data records. Veridion is meant to be a corporate supplier data validation engine and higher level supplier discovery tool. It’s not meant to be a low-level ultra-specific manufacturer or factory discovery platform where you need very specific capabilities like Find My Factory or a 360-degree profiler where it looks at all third party information related to a supplier so you can build up a market profile like Forestreet. It was specifically designed to be an affordable, consumption based, supplier data enrichment and discovery platform for business who:

  • have a large, aging/not maintained, supplier master where they need to validate every entity in that master, normalize multiple entries, and remove inactive vendors
  • need to maintain data on currently active suppliers on registration, certification, and/or ESG (for example) on a regular basis
  • need to do discovery internal to their organization — when Veridion is integrated with the organization’s supplier master, it can restrict discovery to vendors the organization is currently doing business with (through another team at another location for a product in a different category) and help the organization understand which suppliers have more potential to the organization
  • need to do supplier discovery across a wide range or industries, requirements, markets and geographies — in addition to being strong in North American and European supplier discovery and enrichment, they are also very strong across AustralAsia/Oceania, Latin America, and the Middle East
  • need high level information to make decisions as a third party; for example, they have a product specifically for the insurance industry to help them quantify factoring and supply chain risk
  • need the right (location, etc.) data to identify the right data to use for Scope 3 calculations as well as data on statements/commitments the companies have made to ESG/Scope 3 (and have an API that supports ESG initiatives and can be integrated with players like carbmee)

Let’s dive into ESG. They have a few capabilities here to be aware of:

  • ESG Performance Evaluations by way of an overall ESG Score, ESG Pillar Scores and 26 granular Risk Criteria Scores along with corresponding ESG descriptions & score justifications
  • Regulatory Compliance Support to identify suppliers who comply with specific corporate ESG regulations such as CSRD, the EU Taxonomy, CBAM, and CSDD
  • Climate Resilience Support via data designed to identify physical assets for climate risk screening, support climate scenario modelling, and identify supply chain facilities at high risk for (climate) disruption
  • Ethical & Sustainable Sourcing Support through the identification of publicized commitments to sustainable practices, confirmed compliance with ESG regulations, and the ESG scorecard

Compared to some of the other discovery platforms, their generic approach to supplier capability tracking via tagging makes them especially suited for for companies that need to find distributors, CPG providers, and services providers, since you are always searching for these companies by (finished/consumption ready) product type or service type, and their semantic search capability will automatically search for all equivalent terms when you create a search.

For every supplier, it maintains key legal, ownership, location, technographics (technology known to be used by the company), sustainability information (commitments, news, metrics, and scores), and products (UNSPSC) and services, summary data, and tags. Summary data is an AI-generated description of the company, offerings, capabilities, and certifications and tags (for which they identify over 4M tag variations) represent key supplier offerings/features across products, services, technologies, certifications, or capabilities auto-identified using semantic technology. Tags allow them to capture, with high probability, unique aspects or attributes of the supplier without having deep models for every industry, category, and product type; lead to more accurate searches; and make the platform more usable as a generic discovery platform.

If you’re looking for a supplier enrichment/maintenance/discovery platform that can plug into your existing supplier management / sourcing infrastructure, and especially if you are in a distribution / consumer sale / services vertical, Veridion is a platform you should look at.

If it’s used by the likes of Everstream Analytics (last Series B round was 50M), Exiger (valuation at last investment round was 1.2B), and Experian (30B market cap), then you know there is value there.