New Partnership Integrates Sourcing and Supply Chain Risk Management

G00263961

Analyst(s):

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Summary

A partnership will integrate Pool4Tool's strategic sourcing capabilities with riskmethods' risk information. This will enable improvements in their customers' sourcing processes and decisions and risk prevention strategies.

News Analysis

Event

On 23 April 2014, Pool4Tool, a strategic sourcing application suite provider headquartered in Austria, and riskmethods, a Germany-based global supply chain risk assessment software provider, announced a strategic partnership. Under the agreement, Pool4Tool will channel risk-relevant information about suppliers, locations and value chains from riskmethods' Supply Risk Network — covering finance and quality indicators and compliance and sustainability impacts, as well as political and location-based risks, and including data from social media sources — into the processes of Pool4Tool's All-in-One Supplier Collaboration Platform. In turn, riskmethods will use Pool4Tool's supplier management, spending and contract management information in developing its risk strategies and prevention capabilities.

Analysis

This collaboration brings both companies a step closer to their stated goal of tighter application integration, enhancing Pool4Tool's crucial vendor negotiations and relationship management processes and riskmethods' risk profiles.

Strategic sourcing application suites originally covered a set of core modules for senior procurement professionals, including e-sourcing, contract management, supply base management and spend analysis. Recently, some vendors have added complementary functionality (see "Magic Quadrant for Strategic Sourcing Application Suites" ). However, the growing complexity and global nature of supply chains has made true worldwide transparency in collaborative value chains a prerequisite for success. The shift from short-term crisis management to proactive long-term risk management is making detailed risk profiles a significant criterion for decision-making.

The Pool4Tool/riskmethods partnership takes a holistic and integrated approach to this issue, allowing tighter integration and combination of supplier management, sourcing and risk management and providing companies deeper support for their sourcing processes, sourcing decisions and risk prevention strategies. The classic capabilities of strategic sourcing suites will be further enhanced with precise supply chain risk visibility, providing a feature that is unique within that application segment.

The potential use cases for this partnership include:

  • E-sourcing: Risk assessment is a significant consideration in e-sourcing-relevant processes, allowing earlier and greater focus on qualified suppliers that offer reduced risk, where risk scores can enable better decision-making.

  • Supplier management: Risk information can enrich supplier qualifications and evaluations, optimizing companies' supplier development processes and supplier portfolios.

  • Reporting : Integrated key performance indicators will give supply chain professionals, commodity managers and lead buyers a central dashboard and allow drill-down capabilities via single sign-on.

Recommendations

  • Current Pool4Tool customers: Ask both application providers about integration use cases and payment models that leverage risk-relevant information in strategic sourcing through single sign-on.

  • Prospective Pool4Tool customers: Consider the combined capabilities of Pool4Tool/riskmethods "subscription" offering when evaluating providers.

  • Current riskmethods customers looking for sourcing suite deployments: Consider the combined capabilities when evaluating different providers of sourcing applications.

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