On this episode of Thriving at the Crossroads, we have Stephany Lapierre from tealbook as our guest. We talk all about procurement, data and supplier intelligence today. She goes in depth about how tealbook helps business with their supplier data and how the network effect is so powerful.
Listen to the episode here:
TATC Ep 18 – What’s in your tealbook? with Stephany Lapierre
Today, I am pleased to introduce Stephany Lapierre from tealbook. We’re going to be talking all about procurement and supplier intelligence today. Welcome to the show, Stephany.
Thank you for having me.
Stephany, about two plus years ago, you started this company tealbook. Tell me a little bit about the industry problem that tealbook is out there trying to solve.
The idea of tealbook came about ten years ago. I had started a consulting business doing strategic sourcing and procurement across many companies and personally had managed about 500 RFPs across all areas of demand. What I noticed in working with Fortune 500 companies to much smaller ones is the lack of access to their own data and an updated it in an incredible way. Typically, as they’re starting to do a supplier discovery initiative, the first step would be to ask their peers in the room who they know. If they went to their ERP system, the data was on spend but it didn’t give a lot of perspective on what these suppliers necessarily had offered in terms of product and services and what they were known for. If they went to their contract management system, it was more on who had a contract, but again very limited perspective.
You’re bringing up a great point about lack of access to your own data. That just made me think of how procurement can be really relationships driven. Yes, you look at spend and everything that you’re going to pull up in the system, but impracticality isn’t there a lot more to it with the relationships and not just the spend?
In what we’ve quantified now is that it takes time to gather all this data. Even though there are so much information, there are certainly marketplace and catalogues and a lot of procurement folks will still use Google and buy reports. But who they trust most is people that they know, that they are either working with, their internal stakeholders or at least people that are from the same industry. That intelligence is really hard to access. Mostly, it sits in people’s head and stack of business cards. Someone may have started a list somewhere on an Excel sheet but it’s not centralized. It’s not actionable information that can be capitalized by the team and by the company itself.
Are there particular verticals? As you were starting to build tealbook, are there particular industries that this is really challenging for? Is it just a problem everybody has? Speak a little bit more to the size of the problem for most organizations.
We know now that there’s no solution that exists. Companies certainly have tried to build a platform either through portals or build their own home grown technology in order to access their own data. But that data tends to stay very insular. They know what they know, and also is either manually populated by suppliers or someone within the company. It happens to be static very quickly. What I saw, as a consultant for so many years, is seeing companies within the same vertical essentially buying very similar type of product and services and all going through this really tactical process of finding and gathering data to make decision on which supplier should go and move forward into their process.
I knew that if there’s an opportunity to build this across or take a step out of being associated directly with a technology, like an SAP or an Oracle or an IBM. Also, remove yourself from being within a company and you built it more like a LinkedIn way of looking at data and offer that technology to companies so that they could access their own data within their own firewalls and keep that information proprietary. There’s an opportunity to bring big data and peer collected intelligence to a whole new level to the benefit of our users, so that they could accelerate the process of identifying qualified suppliers with the most credible information in real time. Also, benefiting from having updated information that constantly evolve and changes with the landscape of the industry, suppliers and their expertise.
Tell us a little bit about how are you going about solving the problem. In other words, why exactly does tealbook exist? What have you built here around supplier intelligence that you’ve talked about?
The best way to describe tealbook, it’s a way for a company to super charge their supplier master, either by integrating their ERP or uploading their supplier master into a file. Super charging it in a LinkedIn-like dashboard that gives them instant access to updated credible data on suppliers themselves as well as connected their company through integration. Also, allowing for peer to peer exchange. Obviously, sharing of knowledge, leveraging their own existing supplier base, which is really important for buying power, but also to have more transparency across the relationship that exists. Understanding better what their actual suppliers do so that they can leverage them appropriately, and building legacy.
That’s the biggest thing that we saw, is that companies don’t have legacy. Huge companies when we talk to, “How do you currently share supplier intelligence?” Everybody, first of all, smiles and most of them say they don’t do a very good job and typically it’s in person. That’s not sustainable in a global economy. It doesn’t build legacy. So that future generations are coming into the company can get up to speed really, really fast, and understand what are the previous relationships and who are the existing relationships within their own organization.
You keyed on something that I want to bring up that’s an important point when you were talking about creating this legacy., one of the things I’ve have talked about with a lot of my consulting clients when I do implementations, is we talk about these three-pronged approach in solving problems and in processes we put in place. We say we want things that are scalable, supportable and reliable.
It sounds like you’re talking about the exact same thing. You can’t scale having everything in your head for supplier intelligence, and then you’ll leave the company and all that’s just gone. It’s also not reliable because we’re humans and forget. We need better access to information or ways to actually track and get at that intelligence.
If you’re not in the room, your data is not actually available, or if someone doesn’t pick up your binder full of business cards, then you don’t have access. The name tealbook came from a client years ago at Johnson & Johnson who had been in this position for a very long time. Before I left she said, “Steph, you need to meet the supplier.” She grabbed this giant binder filled with pamphlets and business cards and it nearly took her a good ten minutes to find the information. I had to run. I remember it was really long. As soon as she found it she goes, “Write it down and give it back to me, I don’t want to lose their contact information.” I walked away thinking, we have LinkedIn, we have Facebook. How do we not have a better way? Because there’s a wealth of intelligence that sits in this binder that not only she doesn’t have access too easily, but the information stays really, really static and our team can’t access and J&J can’t capitalize on.
Imagine bringing this to a platform that makes it really easy for people to essentially feed the information very intuitively at a very scalable level. It’s self-curated by the way that the technology is handled. Suddenly you’re having a really powerful way to bring good quality, valuable supplier intelligence that our users can benefit from. The beauty of it is the network effect of tealbook as our customers are highly motivated to have more companies using tealbook, because it benefits them in getting better intelligence and more prospective. That’s extremely valuable. The same with suppliers. I’ve spent so much time updating all these different portals and systems that don’t do anything for their business other than getting paid, which is great, they need that. But it doesn’t get to know them based on who they are connected to and what they actually do.
Having that intelligence and using machine learning so that we can get to know them better. All they need to do is maintain their information in one place that updates all of their customers, gets to know them and use that data to put them in front of other customers that are similar, that have similar types of needs at the exact moment they’re looking for their product and services.
Suddenly, you are streamlining the process. You’re bringing instant supplier discovery to a whole new level. Financially, the impact is to access more suppliers, increasing competition, increasing value, bring more spend under management, that’s great. That enables you to bring millions of dollars in savings and that’s great. But more importantly, it reduces this tactical operational time that procurements spend. If it does and we’ve quantified, it takes six weeks or more on average to identify qualified suppliers. That’s an enormous amount of time when your internal stakeholders need to get things done.
I think you keyed on a really important point here about the time it takes to gather the data, and in my brain what I heard is, it takes them so long to gather the data instead of actually making the qualitative and the other decisions that they need to make around the supplier. It just makes the process that much longer to actually move things forward, because it takes you all this time to gather that supplier intelligence because it’s manual, it’s not shared, it’s in people’s head, it’s in their tealbook.
It doesn’t give perspective. You’re getting a report. It’s great, but you’re not getting more prospective beyond these suppliers. You have to contact the supplier to see if they are interested, if they have a conflict, if they meet the requirements and often it’s cold calling just before you get the process. Even before that, it’s to find them, who are the suppliers that are playing in this space. You’re typically very limited to who you know in your own network. We know now even within the same vertical, it’s very clicky based on who used to work at this company now is working at this company using the same supplier trends when you’re not really giving yourself an opportunity to identify potentially better suppliers.
It’s a distinction between leveraging your own existing suppliers. It’s really important. Not having transparency across an organization to enable this to happen easily, it impacts the business. Also, on the other spectrum, it’s identifying new suppliers that are potentially better, bring more value, more innovative and can truly positively impact the business. Those are the ones that are really difficult to find and to qualify. We bring that to a completely different level.
Talk a little bit about this Dun & Bradstreet partnership, that you’ve had some changes to the model over the last six months. Speak a little bit more about that and the difference that has made for tealbook as you’ve been starting to scale.
We were challenged. We initially thought that we were going to grow the intelligence organically, and as most market-place have done, taking their supplier master from their customers. We thought we were going to be able to do that within a smaller vertical and do that really well and then expand into other vertical organically. We were engaged by probably one of the most influential and disruptive chief procurement officer on the planet.
He was looking for tealbook. He had manually used lists. He had contacted every possible technology systems and he could not get what he needed out of them without committing to their entire modules. If he went to a data company, all he got was data with no opportunity to quickly filter and identify suppliers through that or a market-place that would not just sell the data. He was looking for tealbook. He loved the vision, loved the technology, wanted to find something that is extremely easy for the buyers to use and also extremely easy for suppliers to update, so that it would be well adopted. It had an opportunity, if adopted by multiple companies, to become the most valuable source of supplier intelligence.
We were completely aligned. But what he challenged me is to get it to a giant market-place. He wanted to access as many suppliers as possible, as fast as possible and then pull the data into a spend analytic platform that was going to data mine a ton of data to give actionable information, so that procurement could make faster decision, essentially in minutes, and be able to integrate within more intuitive contract management systems. He’s seeing us, “I’m going to bolt on the best in class, the most intuitive platforms so that my buyers can make decisions in minutes and resulting, obviously, in a lot of savings and having a lot more access to diversity suppliers and more innovative type of suppliers.”
Anyway, he challenged me. One of our advisors, we were looking at should we contact Oracle, SAP. We know Ariba and Coupa have about the same amount of suppliers in their network. It was our advisors who says, “Stay technology agnostic because if you do you’re going to be able to integrate with whatever your clients are using and that’s we need. We need a single source of truth.” SAP can only be the single source of truth for SAP customers or Ariba customers, the same with Coupa and the same with Oracle.
If you partner with Switzerland, tealbook can say Switzerland can be a standalone that essentially becomes a front-end platform that’s centralizes all of the data and integrates with vendor management, contract management, ERP, RFP tools, etc. which really, in our role map, the beauty of tealbook is that we can become the API of supplier intelligence for all of this procurement platform.
We contacted Dun & Bradstreet. For them, it’s an opportunity to enrich the data. On one hand, a lot of clients said it makes you legit, the partnership with D&B. They are the gold standard in financial risk core and commercial database. On the other hand, their data is not great. If you say to D&B, the percentage of not great, they would roll their eyes. I’m sure that they believe they’re probably much higher than the perception of customers, but that’s because there’s no incentive for suppliers to go into D&B’s database and correct the data. It’s pulled from different public sources.
We have the opportunity with the D&B partnership to pull two million supplier record. We actually are the only platform that translate the NAICS code into a natural language that enables our filtering system in our search engine, which is essentially a very targeted Google-like powerful search engine for procurement to identify qualified suppliers. They can use natural language, no codes, no categorization. How would they use Google to identify suppliers is essentially how they can use tealbook. That’s really, really powerful. What we have is suppliers coming in and enriching their data by a 100% because they get to see the data and they get to correct it. Then, we layer additional data that makes tealbook one of the most valuable sources of intelligence in discovery tool.
Talk a little bit about the network effect. You’ve got some of the early customers coming on board. Explain how this network effect is supposed to work as more and more customers are going to come on to the platform.
Having the opportunity to have a disruptive CPO to advocate and wants us to be successful is invaluable, because I don’t know any other CPO in the planet that would allow to invite essentially two million suppliers to tealbook. We are in the midst of that EMAT campaign. We have over 30% open rates on the EMATcampaign of suppliers that are being contacted. We’re investigating now a partnership with another data on the digital marketing hand so that we get the better contact information from sales, marketing, business development who would actually care about updating their information so that it best represents their capabilities.
That’s pretty incredible, to get a 30% on an EMAT campaign from one customer. Already suppliers are reacting to the message and the message is very collaborative. It’s about come and tell us more about your company because we want to be able to find you and consider you for opportunities. We spend $4.5 billion a year. It’s about knowing them, finding suppliers at the appropriate time in leveraging their capabilities.
The network effect just with that one customer is tremendous and we have fairly significant role map of other clients who’ve come on board. Again, implementation is very simple. It doesn’t compete with what exists. It really optimizes their existing system. We have a very strong pipeline of customers. For each customer, there is an invitation to their existing suppliers, leveraging their relationship. There’s also a communication to all other suppliers, encouraging them to come back to tealbook based on having more customers that are similar to their existing customers that have very similar type of spend.
The motivation for suppliers to engage with tealbook, to maintain their profile, to make sure that the information is accurate. We have other methods of self-curation within the platform that makes it tremendously easy for suppliers to engage and advocate for tealbook. The more of their clients are on tealbook, the more credibility it gives them and the more going to be position them stronger in front of other potential business opportunities. They are advocating for us and our customers are advocating with other customers to make sure that it becomes a single source of truth. The network effect is actually incredible.
Speak a little bit to being technology agnostic. You made a comment that you were Switzerland, effectively. If a company uses SAP, Oracle, is in a multi-ERP situation, how could tealbook fit in for them and help them in terms of the supplier management process?
We had a company that contacted me a couple of weeks ago and I had never heard of them. She’s on the phone, I asked her, “What’s your challenges today? What are your goals and where does tealbook fit into this?” as I’m Googling to find out who they were. They’re a $4 billion market cap company, so they’re not small, I just never heard of them. What she said is that they had 435 separate business units running on 435 separate ERP systems and they have 90,000 suppliers that were not centralized.
Imagine if you’re spending that much money and you have no access to your data, the power centralizing 90,000 of your existing suppliers in a way that you can instantly access the information and leverage those partnership is incredible. We have, through integration and we’re in discussion and we’re bringing someone on board who’s been responsible for technology partnership for many years. He has a lot of those contacts. We’re really incredibly excited about that, that person coming on our team. But also it’s taking it one client at a time and assessing what they’re using. It could be also as simple as taking a batch file and multiple batch files from all their ERP systems to kick off their tealbook and then tealbook becomes the standalone single source of truth.
Now, if it’s integrated it’s just easier, it doesn’t have to be manually uploaded every quarter to clean up the information. It’s instant feed. All we mirror is their supplier master. Everything else is within tealbook, but what we make sure is those are actually suppliers that you’ve paid before. You have some kind of relationship beyond also knowing through tealbook who is preferred, who’s qualified, who’s do not use, who’s restricted, who’s has an MSA, who has a CDA if it’s integrated with your contract management system.
We’ve talked recently with a very large bank who said they have so many different legacy systems and all the information is very archaically stored. Financial contacts are in their ERP, their contract contacts within legal, their sales contact is within their profile, Think 360. But there is no place where it pulls it all together in a way that actually makes it more actionable. It doesn’t give additional perspective. There is no social media component to the data that they are accessing, and so again, another way for us to bring value to large corporations.
You’ve talked about a few of your different customers and some of the types of companies that are approaching you. Given that you’re a start-up and you’ve been around for the last couple of years, let’s talk a little bit more about the customer base. I like to share with those listening in to find out where are you at in your journey. I always ask a guest this simply to help prepare people that might be curious about it on the other end, so they know. The more informed you are, the easier it is to make decisions. I truly don’t believe people actually discount start-ups. It’s just they want to know where you’re at so that they can plan accordingly.
We’ve got three different levels of categories on the show. We have the first one that I call alpha beta customer. That’s, “We’re working on the very first customers and getting the first customers live.” We have category D which is done at least once, “I’ve got at least one live customer or up to five. I’m getting more experienced with the process and the onboarding and how that would work.” Or category E, which is an existing customer base, “I’ve got more than five companies live on the system.” Where would you say tealbook is on your journey?
We have six enterprise customers signed up to tealbook. We launched the enterprise platform. It’ll be a year on December, actually. I think that’s proven success that there’s value there. Our smallest company or customer, it’s a $2.6 billion market cap company. Our largest one is a $95.4 billion market cap company. It just gives you a very broad spectrum.
Two of our largest customers, one, wants to leverage their existing relationship. They want to push information out to the business so that there’s more information sharing, there’s more understanding of who are their existing partners. They can better leverage that data and give internal stakeholders the ability to access their own information. Because typically if you ask usually the business, “Who are your preferred suppliers? Who’s qualified? Who do you have a contract?” They don’t have access to that information. Giving information and allowing them to initiate the process of due diligence, because they know what they are looking for in a room and be able to automatically bring procurement to collaborate, even though procurement is not in the room, which we have through our app, is incredibly valuable. That’s one of the spectrums.
The other spectrum of our large client is the one that I said is looking to access as many suppliers as possible, as fast as possible. It’s very, very different in their philosophies. We respect both. Our smaller client is more about they’re growing really fast. We have some that don’t have even a product on the market, they are still on development. They are just buying. They’re spending a lot on different categories. They have roughly 1,400 to maybe 3,000 suppliers in their supplier master. It’s still not insignificant compared to the 90,000 to 150,000 suppliers, but they’re looking for new suppliers. There’s increased demand on procurement to identify new categories of spend and no real single source of truth that they can go into today.
As we’ve grown, our smaller clients, when they came on board, it was just their data. It was more about, “Okay, we’re going to start building intelligence,” sharing that knowledge internally, making sure that we add intelligence to our own suppliers and that our growing team can access that data. They couldn’t really source for new suppliers because we didn’t have that many. Now that we have these bigger clients on board, they’re benefiting tremendously from that data because we have about 90,000 of those suppliers that are linked to an existing customer. They can’t see who it is. We are very protective of the proprietary intelligence. But the fact that they are in tealbook, that they are linked to another client that we have, we provide industry perspective through an endorsement/tagging system within tealbook.
It gives them broader prospective and gives them better confidence that the top ten, fifteen suppliers out of the maybe 2,000 are some that have more credibility because they are known by other companies within their vertical and by people that have similar position to them and who they are connected to. They’re able to identify new qualified suppliers within seconds and then qualify them in a way that they can then move on to their regular processes within minutes, which typically now would probably take six to twelve weeks to be able to do this efficiently.
I like something you mentioned. I’d like you to elaborate on this a little bit, because I haven’t heard that many people talking about it. We know procurement can be the 800 pound gorilla that’s perceived as the guy that’s just pounding on the table, looking to save cost. You have talked about an interesting concept in using tealbook for the supplier intelligence to allow the internal parts of the organization to work together better.
I think you’re right that procurement isn’t always at the table with other departments and other areas of the companies that have those supplier relationships. Speak a little bit more to how that process is working and some of the early things that you have seen or any stories you have from some of your customers about how that process is working.
Procurement is changing. It’s so incredibly fun to be in procurement. There is increased pressure for them to bring value beyond savings. You’d put targets at $20 million a year. The first year is easy, the second year. But by the third, fifth year it’s hard because you now have tackled all the low hanging fruits. You have to look how procurement can bring value beyond saving. Savings will never go away. That’s something that’s also very easy for procurement to essentially evaluate based on those metrics, because it’s tangible metrics. The other metrics that they are looking in the increased pressure on them is to become more strategic, to increase collaboration.
I’m intrigued by this conversation about, how do we help people work better together internally? You’ve talked about external phasing for procurement, but I want to hear more about how you help organizations work better internally. We know it’s often a challenge with procurement working with other internal departments. I come from a treasury background, so I might be working with treasury or finance or other areas of the organizations that have a lot of supplier spend. Can you speak a little bit more about how that helps companies internally manage their processes?
I think that as you pointed out, one of the biggest challenges for procurement is how do they best partner and bring most value to the business. Often they’re probably feeling that they have to win that relationship, sometimes playing catch-up. They’re always looking at ways to become better partners. We believe giving information and making it accessible between team is really key for procurement to be able to be a lot more proactive about maybe the trends or the needs of the business. Having information available at their fingertips enables them to be a lot more strategic and a lot more valuable in terms of identifying the information that the business needs at the moment that they need it.
We did this in a survey in our last white paper, we saw that procuring professional will take up to six weeks to identify qualified suppliers. It’s heavily dependent on the category or the manager or the type of spend, but that’s a long time. If it takes up to six weeks to identify qualified suppliers, how likely is it that the business will go off and start calling their friends and start doing their own due diligence, then you got procurement catching up? How likely will the business to come back to procurement if they didn’t have the information and did not bring that instant value? Having the ability to collaborate and sharing information that makes it very accessible for both sides really enables that relationship to be a lot more strategic and really increase the collaboration as they initiate the process together.
The other point is that the business knows a lot of what they need and they’re constantly being solicited or they bring some experience with suppliers with them. Often it just sits in their head or a stack of business cards under their drawer. How do you bring that wealth of intelligence to the forefront so that it benefits procurement in a way that they can now look at what are the trends, what are the interests, what are the supplier connections that are being made within the organization so that they can become a lot more predictive about what is happening within the business. They can use that intelligence to make them more knowledgeable about the landscape and bringing that knowledge back to the business in a way that’s a lot more actionable. Again now, you’re having a lot more information flowing.
Sometimes with tealbook, we have the two use cases where you can have tealbook just to optimize your own supplier master and your existing relationship. Then you have the other use case where they’re going to be looking for more innovative type of suppliers, maybe small businesses, maybe they’re looking to increase their access to diversity suppliers. If you’re not letting that intelligence in, how are you going to effectively be able to find those suppliers? It’s balancing the two and building business rules around that. But often I hear, “We don’t want to open a can of worms, we don’t want to let the business add suppliers to our tealbook.” That’s fine, we can do that. We can put some restrictions around those features, but why not? If they’re going to do it anyways and they’re going to put these business cards and all these information somewhere else that procurement doesn’t have access to it, let them bring them in. Give them a tool that enables that intelligence to be captured and to be used back to their benefit and the benefit of the rest of the organization. That’s a really powerful way for procurement to bring that positive impact.
I think you’re right in talking about everybody having access to it. Because in practicality, part of the procurement’s role, particularly with a lot of the companies I worked with, is the business has those relationships anyway. People are calling them, they’re not calling procurement. If it’s a treasurer and he’s got certain sets of business and certain suppliers, they’re calling the treasurer. They’re not calling the procurement guy, “Hey, can I go talk to your treasury guys?” That’s not how it works. They’re going to go straight to the source because that’s the person who has the information. I like that you can open it up or the companies are starting to open it up more so that they can actually look at it. Otherwise, procurement never has a fighting chance of getting the information out of the heads of all of those decision makers in business.
Then they go back to tactical, operational ways to get the information through different sources that doesn’t give them that peer perspective. We know that the most trusted source of recommendation comes from people you’re working with and people you trust. Nobody better than internal stakeholders to bring and give that source of trusted recommendations, and that’s what we’re really focused on capturing so that it benefits the organization.
The other point, I think it’s giving a tool that enables the business. We’re building business rules around that based on the type of spend or the threshold. A lot of procurement that we’re talking to or speaking about automation, self-service, pushing information out to the business so that they can initiate the process. That’s the best way in the future that you’re going to be able to scale your procurement effort. It’s not going to be through head counts as much as it used to be. It’s looking at technologies that will accelerate processes and also provide information so that people can be better informed and make faster and better decisions.
Within a process where the business is able to see who their preferred suppliers are or suppliers who have been vetted or suppliers who are connected or have been tagged by procurement, enables them to have access to the right information. Then giving them a tool where they’re starting the process instantly invites their category manager to collaborate. You’re now essentially setting for collaboration between procurement and internal stakeholders when the need occurs. In that meeting room where procurement is very rarely sitting, that category manager is aware that there is a need. They don’t necessarily need to be in the forefront of that. Especially if it’s below a 100,000 or 250,000, let the business initiate the process with the right information. But then you can be a lot more proactive and say, “We know there’s an RFP coming up, you let me know if you need any support. I’ll make sure that I’ll keep an eye on things.”
Or however you want to approach that partnership. That’s key. Now you’re not again playing a chase to make sure that you’re involved early in the process. You’re involved at the inception of the process, and that’s because you’re giving the business access to the right information that gives them value.
This has been a great interview. I really enjoyed hearing more about tealbook because it is one of the first supplier discovery platforms I’ve heard of. Especially I love this network effect and that you’ve got people being able to share things across companies. This has been really great to hear about this. I appreciate you joining us today. I have one final question for you. I ask all of my guests on the show where their favorite travel destination is that they have ever been to. Then can you tell us why it was your favorite?
I’m always torn in that question between two. I’m a big skier, and there’s nothing that makes me happier to be at the top of a mountain, especially with my family or friends. I would say being somewhere in a ski resort out west makes me incredibly happy. The other side is I also enjoy being on a beach, very non-complicated, not big resort person, a beach in a local place where I can live the culture of the people that are local and to stare at my kids. I’ve got three little girls, ten, seven and three. When I have a chance to sit and watch them play for hours in the sand and have a place where I can completely, not fully disconnect, but try to attempt to disconnect. That helps me recharge and gives me that quality time with them that is much needed.
Thank you so much for joining us today, Stephany.
Thank you for having me.