Supplier Risk And Performance Management Takes Center Stage At Emptoris’s Customer Event

Having attended Oracle’s customer event a couple of weeks ago, I wasn’t sure I’d be able to make it to Emptoris’s Empower event this year, but I'm glad I was able to attend. The quality of the external speakers, the access to Emptoris execs, the content mix (high-level procurement trends and implementation best practices), the plentiful opportunities to chat with customers, partners, and employees — all these made it an extremely valuable couple of days.

A key event theme was the urgent need for procurement leaders to improve their risk monitoring and mitigation processes. For instance, according to Deloitte Consulting’s 2011 CPO survey, nearly 60% of respondents believe their risk exposure is higher than a year ago. Emptoris’s President & CEO Patrick Quirk explained his company’s response, with an ambitious roadmap to convert the acquired Xcitec product (now called Emptoris Supplier Lifecycle Management)  into a comprehensive supplier risk and performance management suite (SRPM), in line with our description of this category: FAQs About Supplier Risk And Performance Management Software.

Oliver Lawrenz, VP of supply chain management technologies at ABB, described his company’s Xcitec implementation (they bought it before the acquisition), including a brief demonstration. (Letting customers do demos? Now that’s what I call high risk!) Lawrenz drew particular attention to the product’s ability to support multi-dimensional risk analysis, by product, business unit and/or region, not only by supplier. It also does a great job of tracking supplier evaluation and improvement activities, so supplier managers can see, for example, where several business units are experiencing similar problems with the same supplier who is nonetheless being onboarded by other divisions. Alternatively, category managers can view the same data from a different perspective, such as to compare risk levels across their bidder panels.

Another theme was the difficulty of hiring and retaining good procurement people. Around three-quarters of CPOs expect these to get worse in 2012, according to Deloitte. Several CPOs, from Anglo-American to Qantas, emphasized the need to invest in training, focusing particularly on in-process learning rather than listen-and-forget classroom sessions. Interestingly, of the 5% of Deloitte’s respondents who invest more than 4% of their budget on training, 70% claimed to be exceeding their performance targets compared with only 40% of the remainder. This is a particularly hot issue for me, because I provide education and training on software negotiation to Forrester clients and often encounter the obstacle that they don't have sufficient budget for such training, or, worse, can afford the training but aren't allowed to travel to a Forrester office to receive it. As I tell them, if you think education is expensive, you should evaluate the cost of ignorance.

Bottom line: Focused events that combine domain thought leadership topics with customer case studies, like Empower (and I'd include Ariba Live and the Zycus Experience Tour in the list) demonstrate how and why best-of-breed specialists often beat their larger but less-focused competitors, particularly in emerging spaces such as SRPM.