How to Navigate the Fragmented Supplier Management Solutions Market from Gartner
William McNeill, Senior Director Analyst
Micky Keck, Director Analyst
Koray Kose, Senior Director Analyst
Per Gartner, “The market for supplier risk management solutions remains fragmented, with both specialists and suite vendors offering solutions. This research will help application leaders supporting procurement and sourcing to understand different types of vendors and how to shortlist and select the right solutions.”
We believe that this report is important because organizations don’t have a solution that equally supports all of their diverse requirements for supplier management. In our opinion, the ability to address primary use cases (risk, performance, governance, innovation, etc.) is dependent on the vendor type, illustrating the importance of an effective and comprehensive supplier management strategy.
The various vendor types that are discussed in the report are listed below with a brief snapshot of why each group doesn’t meet a buying organizations end-to-end supplier management requirements.
- ERP Vendors: “Many companies use their ERP system as the vendor or supplier master data system where global IDs (when used) are assigned and stored. However, ERP vendors often fall short when it comes to non-transactional information required to work with a supplier.”
- Strategic Sourcing Application Suite Vendors: “Supplier management is one of the four core modules of a strategic sourcing suite.” “Combined with the fact that none of the suite providers have their origin in supplier management, this means that functionality and flexibility are often limited and can vary significantly between vendors in this category.”
- Supplier Relationship Vendors: “Over the last decade, a new type of solution has emerged, more focused on collaboration to support the management of ongoing development and innovation projects.”
- Supplier Information Management: “Supplier information management solutions were originally created to provide supplier onboarding support for buying organizations.”
- Integrated Risk Management (IRM) Vendors: “IRM is more than just supplier risk and supplier management.” “There is very limited support for supplier management beyond risk.”
- Supplier Risk Management Vendors: “End-to-end (E2E) supply chain risk management (SCRM) spans physical supply chain functions and product risks across all supply chain domains, as well as strategic, tactical and operational time horizons.” “These solutions are not usually a good fit when a customer is looking for other supplier management functionality beyond risk.”
- Supplier Governance Vendors: “Supplier governance solutions are a result of combining contract life cycle management (CLM) and supplier performance management to enable buying organizations to track how well suppliers are living up to agreed SLAs and obligations.” “This type of solution is primarily used for a few highly complex contracts and setting up the system can be time consuming.” Per Gartner
According to Gartner, “too many organizations are looking for a supplier management application without having a clear idea of what they want to achieve with it” and provides recommendations for “application leaders supporting procurement and strategic sourcing and looking to automate supplier management.”
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Gartner How to Navigate the Fragmented Supplier Management Solutions Market, William McNeill, Micky Keck, Koray Kose, 23rd February 2021.