Specialist
Former account executive at Assent Compliance Inc
Agenda
- Demand drivers for supply chain compliance software, including broader themes and specific laws and regulations around the world, particularly in the EU
- Key offerings across the industry, focusing on data collection and management
- Industry TAM and related growth
- Industry dynamics, addressing primarily Assent Compliance and Ipoint-systems, as well as SiliconExpert and BOMcheck, in addition to supply chain software companies such as Blue Yonder (TYO: 6752) and Manhattan Associates (NASDAQ: MANH)
- 1-3-5-year outlook – opportunities and risks
Questions
1.
Could you give an overview of the supply chain compliance software industry? Some also refer to it as supply chain risk software. It’s worth noting that you were with Assent Compliance for around three years as that will be a focal point given it’s perceived as an industry leader.
2.
How has this industry evolved? Obviously you’ve been involved in various alignments of software and compliance and this category is very focused on supply chains and sourcing. There seem to be more laws and regulations that multiple companies, including manufacturers, retailers and so on, need to account for. How would you characterise the industry compared to 1-5 years ago?
3.
Could you highlight the laws and regulations that are most important in this industry? You discussed conflict materials, California Proposition 65 and more specific EU laws. I think there are also regulations related to human rights, anti-corruption and so on.
4.
Could you outline how the different platforms or sub-categories within this industry interact? It seems as if the companies responsible for supply chain compliance software are really focused on gathering or managing the related data. I would think companies need to have all this information to then access the information and perhaps get alerts when there are problems or potential problems. It seems you can assess it in multiple ways, given all the different laws and regulations across areas as large as the EU and as specific as California.
5.
Could you break down the industry into sub-categories? You made a very compelling case that there’s a need for gathering the data and a corollary of that would be ensuring it’s updated and accurate, then managing it accordingly. It seems that Assent has done this very well, making sure there’s comprehensive, accurate data that the company can organise, manage and communicate about. You mentioned SiliconExpert’s product library but it sounds as if you’d question how updated or dynamic this is regarding adding new elements.
6.
To what extent have companies transitioned to the cloud and embraced SaaS platforms? I imagine adding more data, modules and real-time capabilities is very important as companies grow. How would moving to the cloud impact gathering and managing data or data-related communications and alerts?
7.
How you would characterise the supply chain compliance software industry’s TAM and the growth that we have either observed or will observe over the next 1-3-5 years?
8.
I came across research indicating a 12% CAGR for this category. In January 2022 Assent announced a USD 350m investment, indicating the company had reached unicorn status. It communicated an ARR increase of over 50% over the prior 12 months, which suggests that Assent underwent that level of increase in 2021. Is that a good proxy for the whole industry or is Assent growing more because of its comprehensive solution, or growing less because it’s so much bigger than competitors?
9.
Assent, Interos, Prewave, Resilinc, Source Intelligence and iPoint – the latter of which I believe focuses on conflict minerals – all have offerings involving data gathering, the database itself, data management and data-related communications and alerts. Would you put any or all of these companies into the broader comprehensive solution category?
10.
What distinctions would you draw between Assent and iPoint’s solutions? Assent seems to be the breakaway leader with iPoint in the clear second position. Why might one win in certain contexts and the other win in alternative contexts?
11.
How directly involved are supply chain software companies such as Blue Yonder, E2open, Manhattan Associates and the large businesses within Oracle and SAP in the supply chain compliance software industry? Might they partner with companies such as Assent or iPoint or are they developing their own solutions? How do you think about the juxtaposition of the companies in these two categories?
12.
Would it make sense for a large supply chain management software company to buy more of a supply chain compliance software provider to add to its solution? I imagine that customers would consider integration fairly compelling and there’s also an obvious cross-selling opportunity. Alternatively, do you think these companies don’t need a broader platform provider and could be very successful independently, given the strong demand?
13.
What is your 1-3-year growth outlook for this industry? We’ve discussed how this category came about, why there’s so much need for these solutions and how increasing laws, regulations and even social media are contributing to its growth. We also discussed the risks for companies who don’t embrace these solutions, but there are also risks for companies involved if they’re not doing things correctly. It seems as if we’ve landed on growth somewhere between 12% and 50%.
14.
Do you have any final thoughts?
