On August 1st 2018, Gartner published the 2018 edition of their Magic Quadrant for Strategic Sourcing Application Suites (SSAS). The SSAS Magic Quadrant evaluates vendors capabilities for Supplier Risk & Performance Management (SRPM), Sourcing, Contract Management and Spend Analysis. Ivalua is proud to be positioned in a strong position in the Leader’s quadrant for the 3rd consecutive time.
While Strategic Sourcing has always been essential to procurement’s success, that has never been more true than today. That is because it is this part of the source to pay process that captures the increasingly broad and strategic set of objectives procurement is expected to deliver against. If Procurement leaders are to help their companies navigate the unprecedented complexity in today’s market and realize the full potential of their spend and supply chain, they need to excel at the Strategic Sourcing process. No where else is the potential to create value and build a competitive advantage so great. And no where else is technology as critical to empowering Procurement teams. So here it is – the top reasons why the latest Gartner Magic Quadrant for SSAS matters now more than ever:
Risk is here. Companies are more exposed to traditional risk due to longer and more global supply chains and now face entirely new sources of risk such as cyber security. SRPM solutions are a key technological enabler of effective risk management programs, helping pull relevant information from internal and external sources, identify potential risks and even offer creative ways to reduce overall supply chain risk. Fannie Mae is a great example, proactively notifying suppliers likely subject to new cyber security threats to mitigate their supply chain risk, rather than just passively tracking risk.
Innovate or die. As companies increasingly depend on their supply chains to drive innovation, effectively collaborating with suppliers is a must. To do so effectively and at scale requires the right sourcing technology and this is an area of significant differentiation between leading and lagging solutions. Ivalua offers deep, workflow enabled collaboration to effectively communicate, share information and project manage efforts to innovate with suppliers. For direct materials, innovations such as deep Bill of Materials (BOM) capabilities support New Product Introduction (NPI) planning. Meritor systematically increased the level of supplier-led innovation with such capabilities. MBf was able to react quickly to save an at-risk customer with a new outpatient services offering.
Comply, comply, comply. One of the biggest shifts in the past decade times has been the shift from a more laissez-fare approach to regulation to what can fairly be described as a hyper-regulatory environment. There seems to be a never-ending release of new regulations that must be complied with, from GDPR to Dodd Frank to Basel III (and soon Basel IV). Additionally, geopolitics and tariff changes create new needs to evaluate supply chains. The ability of solutions to ensure companies can quickly assess and address compliance in such an unpredictable environment differs widely. Ivalua’s position in the Magic Quadrant is influenced by flexible questionnaires that can easily assess supplier compliance and link to improvement plans for non-compliant suppliers, automatically tracking and notifying stakeholders of progress and providing a digital audit trail. And innovations such as our AddOn store make it even faster to achieve, as companies can quickly download the GDPR or other AddOns and enable new capabilities quickly.
Costs Count. While the above objectives are rapidly growing in importance, cost still ranks as the top priority for most procurement leaders. The ability to source more categories and do so more effectively plays the key role in unit price reduction. Leading capabilities make a big difference. Its why Piramal was able to reduce costs by an average rate of 19% over 4 consecutive years.
It’s All About the People. After listing several reasons why technology is so critical to success, I need to step back and admit none of that is possible without the right talent. As much as some software vendors want you to believe their software will magically deliver value, that’s not the reality. People create value and finding and attracting top talent is the top pain of almost every CPO I know. Software doesn’t solve this problem, but it does help. Top talent expects good tools, and that means both great capabilities as well as the flexibility to bring their ideas to life. Because winners don’t stop at best-in-class. They go beyond. Ivalua’s unmatched flexibility let’s our best customers do just that.
Ultimately, it is in the strategic sourcing process where the greatest potential for procurement to create strategic value lies today and tomorrow. Costs still count, but it is increasingly procurement’s approach to other objectives that will deliver a competitive advantage. Strategic sourcing technology is critical to empowering your best and brightest to succeed, and the differences between the best solutions and the rest have never been more significant than today. It is for that reason that Ivalua is so proud of our continued leadership in Gartner’s Magic Quadrant for SSAS.