In their recent report Managing Third Party Suppliers into the Future Aberdeen looks at how supplier management will only succeed if long-term, sustainable, holistic strategies are developed across all business acumen.
Managing Third Party Suppliers into the Future
Using their 2012 report Managing Supplier Risk with Third Party Supplier Data as a point of comparison, Aberdeen has looked across multiple data sets to see what the industry looks like today. Several insights emerged from this comparison, including:
- The supplier management industry has been generally static
- Third-party data monitoring is essential
- Data is being contained, tracked and utilised
- The ability to track and monitor third-party suppliers is more efficient and more required than ever before.
Organisations looking at third party supplier information found that today’s businesses continue to deal with several key pressures. Figure 1 shows the top pressures in the supplier industry.
Third Party / Vendor Information Strategy
One strategy is to view data from third-party suppliers. Figure 2 shows how data on third party suppliers can be collected.
Assessing Risk Contribution of Third-Party Suppliers
Key types of risk that can make or break an organisation include reputational risk as well as commodity risk. Third-party information thorough social media is collected at nearly three times the rate by Best-in-Class organisations than all others. And Best-in-Class organisations are collecting this data at nearly four times greater than all other all other organisations when it comes to understanding executives.
Figure 3 shows that organisations rate third-party suppliers on their level of visibility into key high concern areas of reputational and commodity risk.
One key element in gaining this understanding is the ability of an organisation to calculate its risk and exposure to the industry in the use of third-party suppliers.
By creating a dashboard and looking at key differentiators, an organisation can begin to develop and leverage strategies to reduce risk associated with third-party suppliers.
Highlighted in figure 4 are key capabilities that an organisation can take to support its third-party management initiatives.
What’s in it for me?
What is in it for an organisation that invests in its third party suppliers? Figure 5 shows that it makes good business sense to create a winning team.
- Data remained consistent over a two year period of time from the original finding on third party supplier management
- Visibility into third party suppliers continues to be a top pressure today and in the future
- What you blog, tweet, and say on social media is being tracked
- Your executives and your business reputation are under a global magnifying glass
- Risk’s greatest defence is visibility
- Dashboards make it possible to look at key differentiators for organisational change and strategy
- Realised benefits of a supplier management system far surpass not playing ball
Aberdeen Group has been an international research partner of Nebula since 2010. With thousands of research documents, growing daily, Aberdeen’s research library helps enterprises and service providers discover the priorities and strategies of best-in-class enterprises.
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