Good question, and one that both customers and vendors are going to have to answer very, very soon. As per our post on What Makes a Sourcing Suite, a decade ago, it was pretty simple. If you had decent e-Negotiation support with some document management and reporting, you could claim a Sourcing suite. It might have been a bit of a stretch, but that was the accepted baseline. If you had contract management and some basic spend analysis, then you were best-of-breed. If you had basic project management or category guidance, you were awesome. And if you had optimization, you were a true market leader and way ahead of the pack (as even the majority of The Famed Hackett 8% weren’t there yet).
But that was then, and this is now. These days, if you are a vendor and you don’t have basic Source-to-Contract [S2C], which consists of decent spend analysis, extensive e-Negotiation (customizable RFX and e-Auction), and Contract Management, jacked up with Supplier Information Management, you’re not even a contender (and shouldn’t even get in the ring). Plus, given that many providers offer some project/workflow management, expert driven category guidance, bill of materials support for direct sourcing, [deep] contract analytics [which is not the same as contract management], deep SRM (Supplier Relationship Management, which goes far beyond 1st generation SIM and 2nd generation SPM), Contract/Award Performance Management, Compliance Management, Risk Evaluation and Management, and even true Optimization (as well as other non-core S2C related offerings that they expect to bring them market share), you need more than just a core to compete.
So how do you, as a customer, evaluate an offering? The answer is, on each and every product component that should be there, across every core and supplementary feature that is required and/or adds value. And yes, that’s a lot. But fortunately for you, Spend Matters and Sourcing Innovation have teamed up to help you. As you may know, with the departure of the anarchist (who has since ended up at Coupa as Thought Leader), the doctor took over Sourcing and Supplier Management as Consulting Analyst. But now that the medic is on-board and handling standard sourcing and supplier management as well as business / market analysis, the doctor is now Consulting Analyst for Advanced Supply Management Technologies, including Advanced Sourcing, and putting his PhD (in computer science) and technical chops to good use (putting vendors through the wringer on a regular basis — and, to this end, has co-authored 45 deep dive vendor reviews over the past year, which, if you’re counting, puts most analysts at the big boy firms to shame).
As part of this new Consulting Analyst role, the doctor will be leading the Solution Map efforts for Sourcing and Spend Analysis and co-leading the Solution Map efforts for Supplier Management (with the prophet) and Contract Management and Analytics (with the maverick), as these collectively cover advanced sourcing, advanced analytics of a traditional kind, advanced metrics and process management, and advanced analytics of a semantic kind. Sourcing Innovation and Spend Matters are in the process of finalizing the RFIs now, which will go out over the next week to leading vendors in these categories, and in July you’ll see multi-persona analyses of all the major vendors.
As with the Procurement Solution Maps, the core of the RFIs and the evaluation criteria will be made fully public, as well as the high-level analysis of each vendor across all relevant categories and functions for each of the covered areas. And you will have a robust, completely vendor independent, baseline to evaluate perspective vendors for inclusion in your technology RFIs going forward. And unlike the vendor created RFI templates that used to proliferate and give certain vendors an unfair advantage (as those vendors would always score high on their own feature-rich templates, whether or not the majority of the market needed those features), no vendor is going to have an edge here. First of all, no vendor does everything. Secondly, any vendor that rates themselves higher than a 3 (on a 5-point scale) on any function is gonna have some serious ‘splaining to do as a vendor can only truly innovate in a few areas (and deserve a 4), and there is only one best-in-class vendor against any function, and, thus, only one best-in-class vendor that can actually win business on that function alone (and deserve a 5). Since the doctor is known for being [the] ruthless [honey badger* of the space], these RFIs have been designed so that an average best-in-class vendor will score a 3 [rounded up]. The idea is to fairly evaluate each vendor and push the market forward. And while a slight majority of vendors will likely have been Spend Matters customers over the past year, the number of vendors that have had a relationship with SI over the past year will be around the 10% mark if all of the invited vendors participate, so there should be no doubt in your mind that these will be objective and independent weightings that you should be able to trust and use as a foundation for your evaluations.
So please encourage your potential vendors to participate when they get the RFIs and maybe even go so far as to tell them that you expect them to participate if they want to be considered in further technology buys from you. Because if they truly are a BoB solution, or approaching a BoB solution, if they vendor is not included in the first round, they will definitely be included in the second round.
*Youtube it. (Best video NSFW.)