Smaller firms offering focused risk management services can provide better outcomes than their catch-all counterparts, buyers were told.
These niche providers have highly functional capabilities to help businesses manage specific risks, and can do so at a much lower cost than larger end-to-end procurement suite providers, said Simon Geale, solutions architect at Proxima.
Focused providers also have better datasets feeding into their risk management systems compared to end-to-end supply chain software providers, and are already pitching directly to members of businesses' leadership teams, he added.
“If you think that you can solve your CIO’s problem with a generalist platform, you probably can’t, because [technology firms like] BitSight are walking into his office and they’re showing him exactly what he wants for a fraction of the price.”
Speaking at the CIPS Annual Conference in London yesterday, Geale said there was “not a human answer” to risk management as “there are simply too many checks and balances to be made”.
“Of course technology can help us manage risk, it’s inconceivable that it can’t. The problem is, how can you use technology to manage risk?” he said.
Geale described automated risk management as being incredibly mature and sophisticated at tackling particular problems, but said the area still lacked an end-to-end solution.
Big suite providers, while good at managing transitional risk and providing maps around technologies including AI and blockchain, lack the data that niche providers have, he said. “They’re useful if you get an end-to-end process and plug lots of things into it. Managing risk? I don’t know.”
Geale also said the job of risk management was not owned by a single department, and this was part of the reason niche providers were offering business leaders attractive solutions.
“[CPOs] told us: ‘We don’t own risk management in the different areas because risk management is spread across the business. It’s in different budgets, owned by different people who have different problems. And that’s a problem for us,’” he said.
Executives and non-executives set the agenda and pick the indicators that will be used to measure risk, said Geale. “But they don’t own the problem because they outsource the problem to the accountable leadership.” This might mean to the CFO, the CIO, or the supply chain director.
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