Many people think master data management is all about "customer" or "product" but there are actually many other kinds of master data to manage, such as asset or location. An important one is "supplier", and there are a number of companies that provide specialist supplier management solutions. One of the most interesting is Aravo, a west-coast based company that was founded in 2000. It has a software-as-a-service (SaaS) model in a similar fashion to salesforce.com, and has developed extensive functionality around the specific needs of supplier management.

Large companies have specific processes they need to go through when on-boarding a new supplier, such as checking its credit-worthiness and setting up tax details. However the on-going management of suppliers can be at least as demanding, and this goes beyond a periodic checking of the supplier's credit risk rating. There have been several news stories recently where major brands have been embarrassed to find they were using suppliers with questionable child-labour policies. In other cases companies may want to phase out suppliers who use toxic substances (lead, maybe), or even want to understand a supplier's carbon footprint.

With its latest SIM 10 software release (software as a service providers typically have several software releases per year) Aravo has added vertical solutions for financial services, retail and hi-tech manufacturing, and also introduced pre-packaged solutions for factory audits, toxic substance management, supplier risk management and supplier risk assessment. The company already had pre-built links to D&B credit risk information.

These days many MDM vendors offer multi-domain support so, in principle, can manage supplier information, but few have in-depth functionality of this type. ERP vendors offer supplier management solutions, but Oracle itself uses Aravo's technology. Ariba recently announced its entry into this field, so this is an area that is clearly hotting up.

Aravo has steadily built up some big-name customers, such as Oracle, Caterpillar and Cisco. Its largest customer implementation has 450,000 suppliers registered. This database provides data back to nine separate transaction systems within the customer's firewall.

Supplier management is something that many large companies struggle with. Systems are often fragmented across countries, and it can be difficult to get a single perspective across suppliers, which often trade under quite different names in different countries. Getting an overall assessment of supplier credit risk in these situations can be difficult, especially when companies acquire others and so potentially change their exposure.

With big brand names now frequently coming under the media spotlight and being held accountable for the actions of their suppliers, active supplier management is a subject that is moving up the management agenda beyond the procurement department. Companies such as Aravo that can provide deep and proven functionality in this space should have a bright future.