Supplier and Market Intelligence Literacy

Supplier risk has become a topic of great importance for many reasons, one being that companies are expanding their operations globally and are relying on suppliers in different parts of the world, sometimes at the mercy of forces beyond their control (tsunamis, political unrest, poor work environments, unethical behavior). This has led to a more focused examination of supplier intelligence and the need to understand the markets and industries in which they operate. Excellent, forward-thinking advice from procurement thought leaders is given concerning the importance of market intelligence and solutions providers and consultants are writing about processes and methodologies that can effectively be put in place.

This post is going to focus on how to identify, evaluate and select the correct research resources to use for Supplier and Market Intelligence (SMI).

We all know about information overload. The amount of Supplier and Market Intelligence (SMI) resources available for research purposes can be overwhelming. These research resources can be referred to many ways. For example, Aberdeen uses the term “Third Party Supplier Data” and defines it as “any data that would not have been obtainable from internal sources or directly provided by a supplier during a supplier lifecycle.” The internet makes information readily available for SMI purposes, but it’s easy to get frustrated with search results that are either too high level or not specific enough. It is an inevitable truth that the valuable information used for critical decision-making (think large scale IT implementations) often times is not free, and can be very expensive. Therefore identifying and choosing the correct resources is a key component of SMI. So again, how does one identify and evaluate these sources?

In the world of research, there is a concept called Information Literacy, which is a set of abilities that enable individuals to recognize when information is needed and have the ability to locate, evaluate, and use effectively the needed information (ALA definition). It is a concept that enables learners to master content and is common to all disciplines and all learning environments.

Drawing and expanding on the concept of Information Literacy, Supplier and Market Intelligence Literacy can be defined as a set of abilities that enable procurement professionals to identify, evaluate and effectively use information that is needed for analyzing, monitoring, and predicting the health and potential risks of suppliers and the markets in which they operate.

SMI Literacy can be broken down into three into three phases: 1) identifying resources, 2) evaluating resources and 3) effectively using the information acquired. The first two phases will be explored in further detail in a series of upcoming posts, organized around various markets and categories. The first post covers IT resources and has just been published. Click here for an infographic of the resources.

To get started, here are some general tips for identifying and evaluating information sources for SMI:

• Some procurement organizations are already very sophisticated about knowing and effectively utilizing the key resources for their particular market.
• Otherwise, if you are new to gathering and evaluating SMI resources, or want to improve, keep in mind that it is all about budget and quality of sources.
• To avoid purchasing overlapping information, determine the current tools your organization is already using for supplier intelligence or risk management. Do you have software that includes a module designed to help with supplier selection/diligence/monitoring? If not, is it more cost effective to purchase such a module from your current provider than purchasing a stand-alone product?
• Investigate any firm-wide subscriptions your company uses. It is likely that your company subscribes to at least one resource like LexisNexis, Factiva, or Hoovers. Departments that use these types of resources are Marketing, Research & Development, and Legal.
• If your budget is lean, consider using free resources from local libraries. For example, The New York Public Library provides access to great resources like Bloomberg, Business & Company Resource Center, Business Monitor Online, Business Source Premier, Emerging Markets, IBISWorld, Panjiva, Mergent, Euromonitor, and many others!
• Evaluate information for credibility and impartiality. Do not rely solely on data provided by current or potential suppliers. Suppliers can provide useful information about the industry or market in which they operate, but for supplier evaluation and diligence purposes use as many outside, independent, resources as possible.
• The credibility of a resource is the number one factor in determining the quality of a source. It is crucial to determine the credibility of the author or institution that is publishing the information. This helps in recognizing “prejudice, deception, or manipulation.” (ALA)
• When using a supplier website for evaluation, remember that one of the main purposes of a company website is to sell! Critical reviews or bad press articles are probably not posted.
• Know how to evaluate a website for quality information, regardless if it is produced by a company, institution or individual. Here are things to examine:

• Authority
  • There should be an easily identifiable person, organization, or agency who takes responsibility for creating and maintaining the information being presented.
  • Can you contact the author or organization by e-mail address, mailing address or phone number?
  • What are the credentials of the author?
• Accuracy
  • Are there grammatical and spelling errors?
  • Can the information be verified?
  • Does the information seem credible? How does it compare with other sources on the same topic?
• Objectivity
  • Is there a clear bias or is the information fair and balanced? Look for and use the link “About Us” to determine if the organization has potential bias.
• Timeliness
  • When was the information published? Is a copyright or date of creation clearly displayed? When was the last page updated? Are links on the site current and working?
    • (Source – quoted from Evaluating Websites, CSN Library Services)

Here are general tips on effectively using the resources you choose:

• Participate in training on how to use all the features of the resource, including the advanced search and browse functions. Be comfortable with calling for customer assistance to ensure you are searching correctly and that you have retrieved all the information that is available on your topic.
• Cite the origin and thoughts and/or quotes of others that you have used or have incorporated into any research findings to avoid plagiarism.
• Understand the importance of copyright and the limitations of use and sharing as set forth in the agreement. Vendors are serious about this and monitor how their research is used.