Supplier Risk
Vendor Concentration Risk
Measures how much spend is concentrated among a small number of vendors.
Why Concentration Is a Risk
When a large share of spend flows to a handful of suppliers, the institution becomes exposed to dependency, weakened bargaining power and a higher fraud and collusion risk. Concentration also signals possible competition failure that the AGSA and oversight bodies probe. AuditPro Core measures how spend distributes across the supplier base so unhealthy dependency is identified and managed deliberately rather than discovered in crisis.
The Numbers
AuditPro Core renders this view from your tenant's live, tamper-evident records. The figures below are illustrative sample data.
Top 10 Vendor Share
41%
▲ 3%
Top Vendor Share
9.2%
single vendor
Categories > 80% Single
7
concentration risk
Active Vendors
3,247
stable
Spend Share of Top Vendors (%)
Categories With High Concentration
| Category | Top Vendor | Top Share % | Spend (R'000) |
|---|---|---|---|
| ICT licensing | Vendor 0102 | 91 | 64200 |
| Fuel | Vendor 0455 | 88 | 51100 |
| Security | Vendor 0588 | 84 | 43800 |
| Cleaning | Vendor 0710 | 81 | 38200 |
| Stationery | Vendor 0019 | 79 | 29900 |
Figures shown are illustrative sample data for demonstration. AuditPro Core renders these views from your own tenant's live, tamper-evident records.
Measuring Concentration
Concentration is commonly expressed as the share of total spend held by the top few suppliers, or via indices such as Herfindahl-Hirschman. A small number of vendors holding most of the spend is the headline indicator to watch.
Legitimate vs Concerning Concentration
Some concentration is unavoidable where a market has few providers, such as bulk water or electricity. The concern arises where a contestable market is dominated by one supplier without a competitive reason.
Continuity and Leverage Risk
Heavy reliance on one supplier creates service-continuity exposure if that supplier fails, and erodes negotiating leverage on price. Diversification and contingency planning are the practical responses.
How AuditPro Core Bridges the Gap
- Concentration metrics: top-supplier share and distribution indices are computed across the full payment population.
- Trend monitoring: shifts toward greater concentration over time are surfaced before dependency hardens.
- Segmented analysis: concentration is assessed by category so contestable markets are separated from genuine monopolies.
- Audit-ready export: the concentration profile exports to support competition and continuity-risk reporting.
Key Takeaways
- Concentration creates dependency, weak leverage and elevated fraud risk.
- Distinguish unavoidable monopolies from concentration in contestable markets.
- Track the trend, not just the snapshot — rising concentration is the warning.
- Diversification and contingency planning are the controls, not just measurement.
See This on Your Own Data
AuditPro Core renders this dashboard from your tenant's live, tamper-evident records — every figure traceable to source.