The Gartner Market Guide for Supplier Risk Management Solutions

• The market direction for supplier risk management solutions is shaped by several trends, including an emphasis on risk management, the transformation of supply chains into more complex networks, increasing cybercrime incidents, the incorporation of AI/ML in risk management solutions, a growing focus on compliance risk, and the need for multitier supplier visibility.
• The guide recommends that procurement technology leaders integrate technology as a fundamental part of supplier risk management programs.
• It provides a list of representative vendors categorized by the types of risk they primarily address. It concludes with recommendations for procurement leaders, emphasizing the need to establish a cross-functional team for creating a risk framework, aligning risk appetite with business objectives, and selecting suitable software vendors in line with prioritized risks and capabilities.

Gartner’s “Market Guide for Supplier Risk Management Solutions” highlights the pressing need for procurement technology leaders to address ongoing supply chain disruptions. Key concerns include supplier viability, cybercrime, and increasing ESG (Environmental, Social, and Governance) regulations. The guide emphasizes the importance of technology in monitoring, managing, and mitigating supplier risk, with a particular focus on real-time or near-real-time risk event monitoring and analysis. Advanced technologies like AI and machine learning drive these solutions towards predictive and prescriptive capabilities. However, the supplier risk management and software market remains fragmented, offering many options but no single solution that meets all requirements.

The guide recommends that procurement technology leaders integrate technology as a fundamental part of supplier risk management programs. Different types of risks require matching technology solutions, which vary in their approaches to evaluating risk – some based on historical data, others on real-time data, and increasingly, AI for predicting risks. Organizations are advised to deploy a tailored ecosystem of supplier risk technology, carefully selecting solutions that meet specific needs to avoid overinvestment in redundant or unsuitable solutions.

Supplier risk management is critical for handling various aspects of supply chains, from product development to phase-out. Effective management of this risk involves a range of activities, including monitoring and mapping risk events, financial viability, compliance, sustainability/ESG, cyber risk, performance, and capacity management. Technology is vital in managing complex and time-sensitive data in this area. The guide clarifies that supplier risk management is distinct from third-party risk management (TPRM), which has a broader scope. It specifically focuses on seven categories of risk: risk event monitoring, financial, sustainability/ESG, performance, compliance, capacity, and cyber-risk monitoring.

The market direction for supplier risk management solutions is shaped by several trends, including an emphasis on risk management, the transformation of supply chains into more complex networks, increasing cybercrime incidents, the incorporation of AI/ML in risk management solutions, a growing focus on compliance risk, and the need for multitier supplier visibility. The guide provides a list of representative vendors categorized by the types of risk they primarily address. It concludes with recommendations for procurement leaders, emphasizing the need to establish a cross-functional team for creating a risk framework, aligning risk appetite with business objectives, and selecting suitable software vendors in line with prioritized risks and capabilities. The guide underscores the importance of a comprehensive approach to supplier risk management, integrating technology as a key component within a broader strategic framework.

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