Monthly Archives: February 2017

Supplier Solutions – All About the Space …

… of Supplier Enablement. In our recent post about Supplier Networks, we discussed the value wasn’t what the provider typically promoted, but the fact that it greatly decreased the effort required by the supplier to do business. It enabled them to be efficient, whereas most sourcing and procurement applications just suck their time.

So if you are going to buy a supplier management solution, then it better be one that truly, truly, truly enables suppliers. So what does this mean?

Find a solution that focuses suppliers on missing, outlier, and information that can’t be confirmed.

Many solutions just send out regular “please review and correct” alerts and call that supplier information management. But information management isn’t about reminders and checking boxes, it’s about finding issues and fixing them. A good solution identifies missing information, information that is outlier from norms (i.e. an insurance certificate is usually only 1 year, but the supplier entered 10), and information that can’t be confirmed (such as third party audits from organizations that can’t be found in government registries).

Find a solution that makes integration with supplier’s systems (MRP, CRM, order management, etc.) easy.

Suppliers need to quickly get POs out of your portal and into their order management, MRP, ERP, accounts receivable, etc. system for which your vendor will likely not have an out-of-the-box integration solution that you are able to implement on behalf of your supplier. So make sure the solution has a well-defined API that makes it easy for the supplier to integrate their systems if they want to and well defined file formats that will allow them to export orders, etc. from your system and import shipping notices, invoices, etc. from theirs.

Find a solution that includes cash forecasting capability for the supplier based on your early payment discounting schedule.

Face it. A supplier isn’t going to go for your early payment discount program just because you say it’s a good idea — they need to run their own numbers and realize that 2% is less than they are paying in interest, etc. Give them an easy to use calculator, especially since their Procurement or AR guys are likely NOT as financially adept as your financial modellers.

In other words, if you want a true supplier solution, find one that truly, truly, truly enables the supplier. Not just you.

eBid Systems – An Old Procurement Provider with a New SaaS Sourcing Solution

eBid Systems started out as an ASP of (custom) procurement solutions for the public sector back in 1999. While relatively unknown in the private sector, this vendor is well known in the public sector, having grown over the last 17 years to a large provider of ASP and (multi-tenant) SaaS solutions to over 200 public sector organizations of all shapes and sizes and about 100 private sector organizations (that primarily serve the public sector).

Even though the e-Sourcing market is well established, and, despite the recent M&A frenzy, there are still a handful of mature mid-market e-Sourcing offerings for a mid-market company to choose from, eBid Systems decided to re-enter the market with a new SaaS e-Sourcing solution called, ironically, ProcureWare, which has been in re-development for the last three years.

A few years ago eBid Systems realized that if they were going to accelerate their growth, and increase penetration in the private sector, they needed to get out of the custom software and ASP business and into the multi-tenant cloud-based SaaS business and rework their platforms into a nimble, quick to setup, easy to use, competitive turnkey e-Sourcing solution. And for the last three years they have been developing that suite. The result is a solid mid-market entry with solid RFX, e-Auction, Reporting, basic SIM and basic CLM and, just like ScoutRFP, enough to get the attention of new converts to e-Sourcing, especially in the mid-market. Plus, their experience in the public sector is very attractive to those companies looking to get, or increase, public sector customers.

The RFX solution allows for detailed creation of information request forms, pricing request forms, and scoring schemes — which can be split among multiple reviewers. The RFX can be sent to selected suppliers, or opened up to any supplier on the eBid network for bidding.

Bids consist of all responses to the RFX, any associated documents the supplier wants to upload, questions (or clarifications) that are asked, and responses that are provided. Suppliers and Buyers can drag and drop documents into the platform and a complete audit trail of all bids, changes, clarifications, and responses are maintained in the audit log.

The (reverse) auction works like a standard low-bid auction, but the interface is RFX line-based. There is no graphical interface at this time. However, the platform also supports forward auctions for the disposal of excess inventory, which some public sector organizations find useful.

The supplier information management (SIM) is quite extensive and extremely customizeable by eBid Systems and can track not only all basic company information, financial information, and even compliance information, but can be customized to track appropriate diversity, public sector classifications, and insurance certifications. A supplier record can also be associated with all contracts and associated bids.

Contract management is all about managing and tracking awards, vendor obligations, and associated data — it is not about contract document creation or tracking of contract documents and deliverables. It’s primitive at the moment but could prove more valuable as time goes on. Contract data is primarily used for alerts, as the system can alert to expiring contracts, expiring insurance, diversity review dates, and so on.

eBid Systems market entry is solid and shows promise. SI expects that we could see a strong uptake in mid-market organizations in the private sector that primarily serve public sector organizations and continued, steady, growth in the public sector. Time will tell. Regardless, for those interested in a deeper dive, check out the recent deep dive by the doctor and the prophet over on Spend Matters Pro [membership required]. (Part I).

London Bridge Has Fallen Down!

Back in October, in our post on how London Bridge is Falling Down, we brought to your attention a post by the public defender that discussed how The Garden Bridge was, again, put on hold, which it should have been given that a review did find major breaches of good procurement process. From allowing a supplier to submit a bid after the formal deadline, to a lack of documentation, to changing the evaluation process once bids were received, to treating suppliers differently – as we said, if any unsuccessful bidder had challenged in court there is no doubt that they would have won their case.

But now it seems, as per a recent post from the public defender, that we are now at the point where The Garden Bridge Loses Treasury Support and London Bridge has, indeed, fallen down. And maybe this time it’s for the best.

You Need a Supplier Network – But Not For the Reasons The Vendor Says!

Every vendor with a supplier network touts their wares, and usually does so quite loudly. They go on and on and on (and on and on) about how their industry leading supplier network:

  • makes it easy to find new suppliers
  • makes it easy to search those suppliers catalogs
  • makes it easy to send out RFXs
  • makes it easy to place orders
  • makes it easy to collaborate with suppliers
  • … and so on and so on and so on (and so on and so on) …

Now, these are valuable benefits, but they are by no means unique to a supplier network. Taking ‘em one by one (we’ll knock ‘em all down as the satellite circus won’t leave town) …

  • you can find new suppliers from online marketplaces, industry associations, co-opetition, and from within your own organization (through better data management)
  • a number of online marketplaces make it easy to search catalogs, and there are a number of suites with integrated catalog management that work quite well, no network needed
  • just about every sourcing, procurement, and related application (suite) has RFX functionality
  • dozens upon dozens of procurement suites, e-commerce applications, etc. make order placement a snap
  • e-mail, online screen sharing, online workplaces, embedded messaging, and so on make collaboration easy

In other words, no supplier network is needed. So why do you need a supplier network?

Could it be for supplier management? Some of the more advanced vendors will submit that with a supplier network will help you:

  • detect supplier performance issues early
  • initiate and manage corrective actions
  • manage innovation management

And it will, but:

  • good metric and performance tracking and regular score-carding can detect issues early just as well
  • there are a number of best of breed corrective action management solutions out there, and many good sourcing suites have this functionality built in
  • and there are solutions for innovation management, and most SXM solutions, which do not necessarily have supplier network capability, have these …

So why do you need a network? And, to be more precise, an open supplier network?

Because supplier information management solutions, supposed to ease the burden of information management, don’t really ease it — they just transfer it to the supplier (who is supposed to log into the portal and maintain it). This sounds great, but given that a given supplier will have hundreds (or thousands) of customers, each with their own sourcing / procurement / SXM solution, instead of one customer having to maintain thousands of supplier profiles, each supplier has to maintain hundreds of their own profile instances for their customers.

In other words, you’ve just transferred costs through the supply chain, shifting your overhead into your suppliers who will, surprise, have to pass that cost onto you. But if you have an open supplier network, a supplier only has to maintain one profile, either in the network, or in the system of their choice that is capable of exporting and updating their profile in a standard (XML) format to the open network as needed. Instead of shifting information management through the chain, and the associated costs, you’ve minimized it, and eliminated the majority of the cost.

ClientLoyalty – Ironic Name, Straight-Laced Solution

Supplier Relationship Management is quickly becoming the “hot topic” among progressive Procurement organizations that want to advance on their supply management journey, and materializing as a slew of checkboxes that are appearing on product selection and evaluation checklists. But Supplier Relationship Management, while a hot topic among buyers, and a hot topic among marketers, is not a hot topic among developers. While many suite suppliers have supplier management solutions, the reality is that the majority of these fall into the classic Supplier Information Management or the slightly more modern Supplier Performance Management buckets.

The reason that SRM is a “hot topic” but not a common offering is that to truly support the relationship “R” in SRM, the software has to go beyond simply tracking information, performance metrics, and action plans. It has to track, measure, and manage feedback — from the organization and the supplier, monitor measures that track the evolution of the relationship — and not just performance, and allow for the collaborative creation of action plans to improve the relationship.

While many platforms will track all relevant supplier information — such as locations, contacts, products; and all performance metrics — such as on time delivery, defect rate, and target cost performance; few will go beyond that. Only true best of breed SRM platforms will address the relationship aspect. One of these, and possibly the newest entrant to the SRM arena, is ClientLoyalty.

ClientLoyalty was founded with the desire to bring true relationship management to companies that realized that in order to get the most value for their money, and the best performance from their suppliers, they needed to actively measure, manage, and improve the relationship. Therefore, they built a tool that allows an organization to track, measure, and manage performance, experience, risk, and reputation and integrate this more holistic 360-degree view into a single relationship strength indicator using net promoter scores.

The net promoter score is a customer loyalty metric developed by Fred Reichheld, Bain & Company, ad Satmetrix Systems, and introduced by Reichheld in a HBR article in 2003. Calculated as the difference between positive responses and negative scores, the net promoter score is positive if the overall experience is generally positive and negative if the overall experience is generally negative. If the relationship is improving, then the net promoter score will improve over time and if the relationship is degrading, then the net promoter score will degrade over time.

The ClientLoyalty NPS Loyalty metric is the (possibly weighted) average of performance, experience, risk, and reputation. Performance is calculated using a net promoter score over hard performance metrics calculated and tracked by the organization and hard performance metrics submitted by the supplier. These metrics will generally differ as both parties will generally have different definitions and calculation parameters. For example, the buyer might define on time delivery as the truck in the yard at 8 am and the supplier might define on time delivery as the driver reporting a delivery on the same date. Because of this, the buyer might have an on time delivery rating on the supplier of 80% and the supplier might have an on time delivery rating for the buyer of 98%. In this situation, the supplier would have a negative NPS due to the buyer’s lower appraisal of the situation – and this discrepancy highlights an issue. In addition, the platform comes with over 90 built in KPI definitions that the organization can use to get started, and more appear with every release.

The platform also supports extensive document management capability. Users can upload and tag critical documents in a central storage system for easy search, reference, and tracking. Contracts can be specially tagged as contracts and additional metadata and tags defined for contract status tracking and monitoring. Attachments can be correlated as well.

It’s a rather unique offering as it appears to be the only one with true, 360-degree, NPS scores and a home-grown sentiment analysis algorithm that can monitor social media sources and news sites to identify relevant comments and stories and extract the sentiment from the sites and stories and integrate it into a consistent score and one of the first platforms built from the ground up with full data import and export capability through CSV, XML, and APIs and extensible document capability.

But, like any new platform, it does have its weaknesses. There is no out of the box support for major procurement and ERP platforms; no ability for automated meta-data identification and extraction; and no innovation management. An action plan is a corrective action plan, not an innovation management solution.

However, especially given the relative dearth of true SRM providers compared to SIM providers and Sourcing/Procurement suites, ClientLoyalty is still one to watch and one to likely put on the shortlist, especially in North America.

For a deep dive into this wily provider, check out the recent in-depth coverage by the doctor and the prophet over on Spend Matters Pro [membership required]. (Part I, Part II, and Part III)