Category Archives: Marketplaces

Commercial Spam Turns 20 Today!


Some other time, some other place
We might not have been here, with egg on our face
I just wanna tell you, made up my mind
You know I can’t help the way I feel inside


Oh, this heart’s on fire
Right from the start, it’s been burning with rage
Oh, this heart’s on fire
One thing buddy, spam fills it with rampage!

And 20 years ago today, Laurence Canter and Martha Siegel unleashed the “Green Card” spam upon the world. While this was not the first instance of Usenet spam, it was the first instance of commercial Usenet spam and, quoting Wikipedia, its unapologetic authors are seen as having set the precedent for the modern global practice of spamming.

Canter and Siegel sent their advertisement, with the subject “Green Card Lottery – Final One?”, to at least 5,500 Usenet discussion groups, which was a huge number at the time, posting it as a separate posting in each newsgroup so a reader would see it in every group they read. Their internet service provider, Internet Direct, received so many complaints that its mail servers crashed repeatedly for the next two days! You have to remember, this was back in the time of dial-up and the highest speed modems available at that time were fax-speed 14.4K modems, with most people still on 2,400 baud modems! But this effort, and their subsequent efforts through Cybersell, which was a “spam-for-hire” company, ushered in the age of spam that we are still dealing with to this day.

Indirect Procurement With Catalogs, Where Do You Start?

Today’s guest post is from Gert van der Heijden, the Executive editor of Spendmatters.nl, and is the English translation of his post, “indirecte inkoop met catalogi, waar te beginnen?”, that originally ran on March 27, 2014.

Organizational buyers are accustomed to thinking in Pareto analysis. This is because buying is an area where the 80/20 rule applies: 20% of the suppliers do 80% of the sales, and therefore these 20% of suppliers deserve the focus. As a result, when Procurement is designing solutions to improve compliance, they often end up with a solution that is inconsistent with what a buyer wants. One area where this often occurs is in the e-Procurement implementation of catalogs. From a Procurement perspective, it might make sense to get the spending under control, but for the end user in the organization, the critical issue is completely different.

An e-Procurement catalog implementation is only successful if the end user is lured to the catalogs and wants to use them without being forced. Compliance is only truly achieved when users follow processes of their own free will. Furthermore, one has to remember that it is the 20% of the suppliers who produce 80% of the invoices who have the most operational customer contacts and it is these 20% of suppliers who are most likely to disturb, and try to circumvent, the process. If the buyer doesn’t like the process, or it’s not easy for him to use, he will be easily swayed by the supplier (offering to make it easier with a direct order) to side-step the process and this will severely hinder your compliance effort.

A smooth process for the purchase of common items, like office suppliers, IT, and food in hospitals (for example), will provide the end user an optimal customer experience and an appreciation for the process. Only once these common, but critical categories, are fully implemented and meet the users needs, should the organization turn its attention to other, less common, categories.

One has to remember that success in e-catalog implementation and roll-out also comes from a proper application of the Pareto principle — focus on the categories that represent the majority of the user’s purchases first, and make sure the users want to use the system for these categories, and only try to go end-to-end once the staple categories are well in hand. That’s because when it comes to e-catalog success, the key is efficiency. That’s how you become truly effective with your efforts.

Thanks, Gert.

320 Years Ago The Bank of England Was Established …

It’s establishment is very important as it was the first bank to initiate the permanent issue of banknotes (which were initially offered to raise money to fund the war against France) …

And 200 years ago today, the Netherlands Bank issued it’s first banknote, bringing the Netherlands into the modern age of money de-coupled from the coinage they were originally a substitute for, 48 years before the Federal Government of the United States entered the modern monetary age (and 121 years before the Government of Canada did the same).

I’m sure our good friend Gert van der Heijden, author of Spend Matters Netherlands over in Amsterdam is very pleased about this, because it’s yet another reason why Europe, and Scandinavia in particular, are so far ahead of us in e-Commerce, e-Procurement, and even e-Government — as they are 50 years ahead of us in commerce practices.

For those who are interested, Wikipedia has a good history of the bank note. We all take paper money for granted, but it is only recently that it has become common place around the globe.

The Board Gamers Guide to Supply Management Part XIV: Le Havre

You’ve mastered Agricola and feel that you are an agricultural supply master and after sailing Upon a Salty Ocean, you feel you are also a master of logistics and market timing. But can you handle the full meal deal? Especially when you not only have to balance food and resource acquisition with trading and energy needs? Le Havre, an economic construction strategy game, adds a new dimension to put your supply management strategies to the test: having to balance the use of resources for food and the use of resources for energy to power ships, brickworks, iron mills, abattoirs, bakeries, and smokehouses which allow you to acquire and trade resources, convert raw materials into useable building materials, and turn raw fish and grain into food.

You win Le Havre by acquiring the most wealth over the course of the game, and you acquire wealth by collecting, selling, and using goods and by buying and constructing ships and buildings which have a monetary value. This sounds easy enough, but it is a significant supply management challenge as you have to continuously make enough money to cover the entry costs to the buildings you need (but don’t own), acquire enough raw materials that can be used to produce energy to power the buildings that produce food and building materials, and produce enough food to feed your constantly growing workforce at the end of every round (just like your payroll for an increasingly growing workforces increases in real life), which requires more and more food as the game goes on (just as your corporate workforce also grows as your company grows and you acquire more property and trade more resources).

Although you want to focus on acquiring buildings and building ships, as this is generally what helps you accumulate the most wealth (especially if you leave out the special buildings), you’re constantly having to interrupt your strategy to acquire food to feed your workers, raw materials for future buildings, and energy sources. The last thing you want to do is run out of food, because then you have to buy food, and if you don’t have enough money you either have to fire sale a building (if you have one) at half of its value or borrow, and every loan accrues interest every round (and there’s no limit on debt or interest, just like there’s no limit in the real world).

The game consists of a fixed number of rounds (defined as 14 rounds for 2 players, 18 rounds for 3 players, and 20 rounds for 4 or 5 players), each of which consists of 7 turns. On each turn, you take one of two actions:

  1. take an offer from the harbour or
    on each player’s turn, new goods arrive in the harbour and are added to the appropriate offer space, which the player can take
  2. use one of the available buildings
    which can include the construction firm that allows you to build up to buildings of your own

The base goods that are available as offers for the player to take are:

  • fish
    a food source worth 1 food or 2 food if smoked in the smokehouse
  • wood
    used to construct buildings, ships, or supply 1 energy (via fire); it can supply 3 energy if converted to charcoal in the charcoal kiln
  • clay
    used to construct buildings, it can be upgraded to brick in the brickworks to build more buildings
  • iron
    used to construct buildings or iron ships, it can be upgraded to steel
  • grain
    a harvest good that can be baked into bread (worth two food) at the bakehouse, or used to grow 1 more grain (at the end of the round)
  • cattle
    a harvest good that can be upgraded to meat (worth three food) at the abattoir and hides (for every 2 cattle slaughtered); also, 2+ cattle produce one more cattle at the end of every round

All other goods have to be produced. These include:

  • charcoal: an energy source worth 3 energy produced from wood in the charcoal kiln
  • coke: an energy source worth 10 energy produced from charcoal in the colliery
  • brick: produced from clay in the brickworks
  • steel: produced from iron in the steel mill
  • bread: produced from grain in the bakehouse
  • smoked fish: produced from fish in the smokehouse
  • meat: produced from cattle in the abattoir
  • leather: produced from hides in the tannery

There are 33 standard buildings (and 36 special buildings, which you should ignore until you’ve built up some experience with the base games). In addition to the 9 resource conversion buildings already mentioned, specifically:

  • Abattoir
  • Bakehouse
  • Brickworks
  • Charcoal Kiln
  • Cokery
  • IronWorks
  • Smokehouse
  • Steel Mill
  • Tannery

The following 8 buildings are also available, and necessary:

  • Building Firms: necessary to build buildings
  • Clay Mound: a source of clay
  • Colliery a source of coal
  • Construction Firms: necessary to build buildings
  • Fishery: a source of fish, which is a vital food source
  • Shipping Line: necessary to trade
  • Wharf: necessary to build ships

In order to use a building, you have to pay the entry fee (if you don’t own it), have the energy sources to power it, and one or more of the base goods required to use its ability. In order to build a building, you have to have the resource cost, just like in Agricola. Not to mention, it has to be available. This is the challenge of Le Havre, not only do you have to balance food production (to feed your workers) with resource acquisition (to build), energy production (to power buildings) and ship production (to acquire fish and trade), but you also have to build at the right time, use the buildings at the right time, and trade appropriately. Especially since, just like in the real world, only one player can use one building at a time, take an offer from the harbour and the resource type associated with it, or get points for a particular building or action. And the increasing food costs make the game quite challenging if you don’t adequately prepare for food production from round one. In a four player game, you will need to produce 113 units of food and in a two player game, you will need to produce 177 units of food! A growing workforce needs to be fed (paid)! And you just can’t borrow willy nilly, as the bank only lends money to cover the cost of food (as in Agricola, you can only beg for food).

If you really want to test your supply management mettle, Le Havre is a good game to test it on. While it will likely take twice as long as Agricola to get through a session, it puts your thinking skills and ability to balance supply (offered resources) with demand (building [utilization] costs) in a way that maximizes overall value generated (as the winner is the one that acquires the most wealth by the end of the game). So give Le Havre a go. You might just get more than you negotiated for. (And get one step closer to the ultimate supply management challenge.)

P.S. If you want a good guided introduction to the game, try the iOS version and see if you can become Le Havre’s next titan of industry. The tutorial is good as is the gameplay. (But it won’t give you the challenge of going head to head with your team-mate — all AI’s have preferred strategies and predictable responses when you play them enough.)

MarketMaker4: A Great Foundation for Successful Sourcing in the Mid-Market

Our last post in our four-part series that posed the question as to what the key ingredients to a successful e-Sourcing strategy are ended with an introduction to Market Making and MarketMaker4, one of the newest arrivals to the e-Sourcing party. However, unlike a number of vendors that sprung up during the latter half of the last decade, their solution is more than another me-too sourcing platform with modules and features almost indistinguishable from the platform that came before.

MarketMaker4’s new and distinct platform is buit around 4-key solution elements:

  1. State-of-the-Art e-Sourcing Platform,
  2. Integrated Company Intelligence,
  3. Integrated Market Insights, and
  4. Market Making.

This is because MarketMaker4 believes that all of these components are vital to a successful sourcing event, and it is not alone in this belief. Despite the fact that the solution was only launched a few years ago, MarketMaker4 already has over 75 global clients! Not bad for a new e-Sourcing start-up that was bootstrapped by its founders until it was acquired by Xchanging last year, which, realizing its significant potential, intends to keep MarketMaker4 as a standalone holding.

MarketMaker4’s modern e-Sourcing Platform is focussed on e-Negotiation support and the core functionality is e-RFx, e-Auction, and Reporting, with all of the standard features you’d expect from such a platform plus a few enhancements compared to the base platforms of the noughts. The most significant of these are the matrix-style bidding, which allow bids to be placed across three dimensions (such as lot, item, and [ship-to] location) and analyzed across different metrics (best price, best price by lot, best total price, best total price by lot, best weighted price, best weighted price by lot, etc.), and the custom weighting formulas that allow a sourcing manager to create custom rankings that can take all elements of a supplier’s bid into account — base cost, transportation, turn-around times, etc. — and all elements of a buyer’s assessment — quality, reliability, brand value, etc. — into account when calculating a total cost of ownership or bid ranking, by item, lot, or auction.

The platform is easy to use and integrates wizard-like walk-throughs for setting up new events. If a user is setting up a (reverse) auction, it walks the user through general settings, matrix design, uploading file attachments, design of the pre-event RFI, initial supplier identification, bid invite creation, and event launch. Progress indicators are included on each step (so a user knows how much is left to do), and all settings are defaulted whenever possible — allowing small events to be setup in minutes. When designing an auction, users have full control over the time and time extension rules, post negotiation override settings, minimim bid increments, ceilings and floors, bid notifications, the matrix view, displayed graphs, and the amount of competitor information displayed (and whether or not it is masked). Creation time can be streamlined by starting with one of the built in auction topics for common categories or by copying an existing event (for a similar category or the same category the last time the event was run).

The integrated company intelligence, which builds on a D&B license for detailed company intelligence through the MarketMaker4 tool (and which will soon be augmented with additional data from Lexis Nexis), allows a company to search for new suppliers in the MM4 database that could meet their category and product needs and then view detailed data that includes company data, financial data, key employees / managers, and contact information. It’s like a supplier network on steroids, as not only do you have a large list of suppliers, but you have aggregated, researched, third-party data on the suppliers, which even includes corporate citizenship ratings (for the sustainability-focussed). It’s easy to use, and allows you to do competitor searches on any company, which makes it really quick to find potential sources of alternate supply to invite to a sourcing event.

The integrated market intelligence is a combination of market intelligence (like you would get from a Mintec or Denali subscription) augmented with category briefs, a currency heat map (that lets you quickly identify the relative strengths of different currencies and trends, as historical currency data is tracked by MM4), and market indicators. The commodity indices cover North American, South American, Western European, Middle Eastern, and Asian marketplaces and more are being added this year.

And, finally, as introduced in our last post in our four-part series that posed the question as to what the key ingredients to a successful e-Sourcing strategy, Market Making is 24/5 project support from an experienced sourcing professional who is an expert in the platform, and the sourcing process it supports, and who is always a quick chat or call away. These professionals, based in North America, Europe, and Asia, are always there and always able to help you in one of the thirteen*1 (13) languages that MarketMaker4 supports.* Furthermore, since an online negotiation tool is useless if suppliers don’t use it, your suppliers also have access to full MarketMaker4 support — at no charge — in addition to bidder training sessions and monthly seminars.

MarketMaker4, which started with a belief that it’s not just what to source, but who to source from (Company Intelligence), when to source it (Market Intelligence), and how to get it right (Market Making), held on to that belief until they built a solution that realized their vision of what modern e-Sourcing should be. And it works. Their customers’ average savings is north of 10%, even without decision optimization (which demonstrates the power of integrated and properly applied market insight) and their average number of e-Sourcing projects is more than three times what it was before their acquisition of MarketMaker4). MarketMaker4 is another great option in what was becoming a dwindling e-Sourcing marketplace with all of the recent solution provider acquisitions.

*1 MarketMaker4 currently supports English, Mandarin, Portuguese, Spanish, French, German, Japanese, Vietnamese, Italian, Polish, Russian, Turkish, and Korean. In addition, because the platform is a modern platform that supports the full Unicode character set, new languages can be added quickly.

*2 While MarketMaker is able to offer support in each of the 13 languages it supports in the product, not all languages are supported 24/5. 24/5 support is only available for English and any language specified in your solution contract.