Few topics in supply chain software are hotter right now than Supplier Risk and Performance Management. Supply chain disruptions caused by the pandemic have impacted almost every company. As a result, Forrester’s timing in publishing its Forrester Wave™: Supplier Risk and Performance Management Platforms is propitious.
What is Supplier Risk and Performance Management?
Well, that’s the heart of the problem, isn’t it? Supplier risk is a huge topic. After all, every company has suppliers and those risks are myriad:
- physical supply chain risk from weather, pandemics, geopolitical disruption
- financial supply chain risk from bankruptcies, M&A, etc.
- ESG risk
- compliance risk
- fraud risk
- adverse media risk
- privacy and security risk
- quality risk
- environmental health and safety risk and
- other risks specific to certain industries (e.g., food safety)
It really can be a “boil-the-ocean” kind of problem. I will not pretend to do the topic justice other than to point out how amorphous it is. (The best content I have read on Supplier Risk and Performance Management comes from Pierre Mitchell at Spend Matters. See here for instance. Subscription required.)
Narrowing Down The Field
It would be an impossible job to analyze the 100s of vendors in the supplier risk and performance market. Forrester made this task manageable using three criteria shared by each of the 10 vendors in the Wave. According to Forrester, each vendor has:
- Comprehensive SRPM solutions they sell as a standalone product.
- SRPM market share of 3% or more. (No real market size information included, however.)
- Target markets shared by a significant proportion of Forrester’s clients. (In practice, this means Forrester excluded industry-specific and risk-specific vendors.)
Forrester Wave™: Supplier Risk and Performance Management Platforms
I encourage you to take a look at the complete Forrester Wave document which is available here. For convenience, here’s the money shot:
Pure Plays Versus Modules
Though each vendor in the Wave can sell SRPM as a stand-alone solution, 7 of the 10 vendors in the Forrester Wave: Supplier Risk and Performance Management are suite vendors. For these providers, SRPM is but one module in a larger source-to-pay offering. In reality, however, I’d guess these suite vendors rarely sell SRPM stand-alone and it has historically not been a major revenue producer for them. (Coupa is a partial exception because it purchased a pure-play SRPM vendor (Hiperos), so it inherited a stand-alone installed base).
There are 3 pure-play SRPM vendors in the Forrester Wave: Avetta, HICX, and Aravo. As you can see from the Wave diagram, Avetta has the largest circle on the chart, meaning Avetta has the largest “market presence”. (Market presence is defined as an equal weighting of SRPM subscription revenue, SRPM subscription revenue growth, and the number of enterprise SRPM clients.)
You might be wondering, why does the vendor with the largest “market presence” find itself on the lower end of the rankings? (To be fair, all of the performers are “strong”. It’s Lake Wobegone!) It turns out that market presence only affects the size of the bubble, but has a weighting of zero in the placement of the bubble relative to the X- and Y-axes. (Apparently, Forrester believes that market presence is determined only by the sales and marketing prowess of the vendors and not by the strength or strategy of the products!)
Some Big Players Are Missing in Action
Forrester had an impossible task, so I don’t want to pick on them. There’s simply no way to come up with a good definition of vendors in this space right now. Forrester went for more generic, platform vendors. The problem is generic platforms are hard to build when every enterprise and every supplier is a potential customer. When everyone is a target, is anyone really?
I do think it is important to note that Forrester omitted two of Avetta’s competitors that have a substantial market presence across several verticals. The first is ISNetworld, which I have written about here and here. ISN is very private but seems to have expanded well beyond oil and gas where it started. The second competitor is Achilles Group, which practically invented the supplier management space in oil and gas in the last century. Achilles group also seems to have expanded beyond it by now.
Watch this space, the vertical players are large and maybe going horizontal. The horizontal players are adding information providers with specialized and vertical risk data. It’s a collision course.
Thanks for the kind words, but although my name is on our risk research, much of the latest series has been greatly informed by some related/deeper team-based work we did for a client recently. So, I need to give a shout out here to Nick Heinzmann, Michael Lamoureux, and Jason Busch on whose shoulders I stand!
Keep up the great work – we love your stuff.
Okay, a shout out to the team then. I am impressed by the quality and quantity of the content your team is putting out. I have to take a long nap after just one post, so I cannot imagine what it takes to publish insights at scale!