In today’s fast-evolving business landscape, procurement and supply chain professionals are confronted with a staggering complexity of risk management (link to complexity piece) that requires a nuanced understanding of various dimensions of risk. The prevailing VUCA environment underscores this challenge — marked by volatility, uncertainty, complexity and ambiguity — which has become a defining characteristic of global markets. Recent events have illustrated how interconnected and fragile supply chains can be.
Many organizations struggle to turn risk awareness into actionable strategies amid these challenges. The understanding of procurement-related risks has surged, yet a fragmented approach to risk management often leaves many companies vulnerable. As procurement leaders look to champion comprehensive risk management strategies they must embrace a holistic perspective that accounts for upstream risks and their cascading effects throughout the supply chain.
It is true that ‘risk management’ in the context of procurement and supply chain management encompasses various ‘flavors,’ supplier risk management, supply risk management, third-party risk management (TPRM) and supply chain risk management (SCRM) (link to definition piece). However, despite the complexity and the efforts it may require, doing it well is a massive value to organizations(link to ROI piece).
Technology can be a game-changer in capturing and unlocking value. However, the procurement technology landscape has become increasingly complex, with a variety of solutions catering to different aspects of risk management. In this multifaceted environment, the integration of different technological capabilities is crucial for effective risk management. Therefore, procurement professionals must pay attention to the nuances of these offerings to optimize their risk mitigation strategies.
An important factor contributing to this complexity is the convergence and overlap of various technology segments (link to landscape piece, including Enterprise Risk Management (ERM), Governance, Risk and Compliance (GRC), Supplier Risk Management, TPRM solutions, SCRM solutions and a plethora of point solutions dedicated to a specific domain (human rights, environmental compliance, etc.). Each area offers distinct functionalities yet frequently intersects, creating a layered landscape of features and tools designed to enhance organizational resilience.
The need for comprehensive risk governance further complicates matters. Organizations must establish clear frameworks that dictate how risks are identified, assessed, communicated and mitigated. This governance requires a proactive stance toward emerging threats and the agility to react swiftly to new incidents. Risk identification and sensing become paramount in this context, as firms must leverage historical and real-time data to unearth threats and avert disruptions.
In a nutshell, risk management is complex and finding the right technology is even more difficult. It is why Spend Matters expanded its product offerings to cover risk more broadly and effectively while considering the potential needs and system landscapes that organizations have or want. In addition to our deep insights on holistic supplier management (including risk), which is the core of our ‘supplier management with enhanced risk’ module, we launched a module solely focused on risk management that covers use cases like TPRM and SCRM.
This module allows users to analyze the capabilities of various solution categories (suites, supplier management, TPRM specialists and SCRM specialists) in order to provide potential buyers with insights on best fit depending on their requirements: focus on risk vs. holistic supplier management, risk from direct suppliers vs. tier-x suppliers, focus on risk detection vs. mitigation and collaboration and so on.).
Therefore, this article will share some of the findings and takeaways from our SolutionMap data. More specifically, we want to answer two questions:
How do the various segments compare?
What are the high-level considerations and differentiators per segment?
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