Promena is a two-decades old company (founded in 2001) that has been offering e-Sourcing (and, more recently, source-to-contract) solutions to Turkish enterprises to major enterprises in Türkiye that you likely never heard off on this side of the world until their coverage over on Spend Matters in 2019 (Vendor Analysis Part I and Part II by Nick Heinzmann, Pro/ContentHub subscription required), if you’ve heard of them at all.
However, they are another mid-market source-to-contract (with some e-Procurement capability) that you should be aware of, as they are a two-decade old company with an annual transaction volume nearing 3 Billion that is now expanding throughout the European market and into North America (mainly through partners for integration and services). The solution is solid, time-tested, modular, multi-lingual (13 languages at the present time), being improved annually (with new capabilities in development for late Q4 and 2024 release), and offered at an affordable price-point for mid-markets. In this article, we will overview the main components of their solution and highlights. (We’ll refer you back to Nick Heinzmann’s Vendor Analysis on Spend Matters for a deeper dive as well as Xavier Olivera’s 2022 Update, especially if you want analyst commentary. Note that a Pro/ContentHub subscription will be required for all of these.)
The typical entry point into Promena for most buyers is e-Sourcing project creation, which allows buyers to define an e-Sourcing project (with basic meta-data like name, department/child company, owner, description, etc.), define the RFX and Auction events that will constitute that project (so you’re not mixing categories, creating projects where only a subset of suppliers can bid on each item or lot, and balancing the need for detailed RFX events for strategic or high value products or services with low-value/non-strategic products or services that can be sourced through a quick-hit auction), define the project milestones and project tasks, and create the team (which will allow different team members to be responsible for sub-events, milestones or tasks). Overarching documents can also be attached at the project level. Note that the platform also supports a Gantt chart view of a project if the milestones and tasks are given start and end dates and tasks associated with the milestones.
RFX functionality is more-or-less what you would expect from a mid-market sourcing platform. You can attach any RFI/RFP/Qualification survey forms that you want the suppliers to fill out (that can be constructed in the internal form builder), select the products from the internal product management functionality (which we’ll cover later) or define new product/service requirements free-form, define the quantity, select the suppliers who you want to invite (from the built in supplier management functionality, more on this later), and immediately send it off. Once the bids are returned, the associated team members can score each supplier-product or supplier-service combination based on the qualification surveys and then see the total price for each supplier-product or supplier-service combination, with the lowest price for each pairing highlighted. In addition, it will show you the lowest bid by supplier across all products/services as well as the savings if you cherry pick the lowest bid for each product or service. Also, the user can, at any time, pop up a complete bid change history for every supplier, which is incredibly useful if you’re doing a multi-round RFX and/or want to see the drop between current system price and the new bid price. Note that, currently, it only supports unit prices (and calculates total prices based on demand), but the 2024 roadmap includes the ability to breakdown the unit price by primary component type (item, freight, interim storage, waste, etc.).
e-Auctions are similarly easy to set up. Simply define the products / services, indicate the quantities, define the auction parameters (starting prices, weightings, start and end times, bid requirements [equal allowed, min/max changes, auto extension, etc.]), invite the suppliers … and go! As with all auction tools, you can see the bids change (graphically) in real time, and suppliers can see where they stand by rank, or, if you so choose, rank and distance to next competitor. It’s important to note that they support Dutch as well as English/standard reverse auctions as not all platforms support Dutch auctions.
Once RFX events and auctions are complete, awards can be defined in the system through the creation of award document. These award documents can then be used to kick off contract creation. In the current release, contract management is foundational and is essentially a searchable electronic filing cabinet that stores meta-data indexed executed contracts with complete pricing information (extracted from the award documents), but a new version with negotiation support is currently in beta and final (security) testing and should be released by year end.
For every contract, you can define system-wide foundational meta-data fields, additional fields that may be specific to that contract, or the product/service category the contract falls under, parties (and who signed on behalf), associated documents and addendums, add it to a group, and break out the price for every product or service in the contract for easy access.
The next major area of the system is supplier management. Supplier Management in Promena is essentially information, relationship, and baseline performance management. Supplier management starts with basic profile creation (company details, HQ address, and third party identification numbers) and onboarding. Onboarding asks a supplier to identify the products they provide, their banking information (for payment), and additional information (through buyer defined forms) specific to the organization’s need (which could be around ESG, product reliability metrics, etc.). Individual forms can be assigned to different individuals in the organization to review and approve (as the platform allows for approval flows across each major platform area, which will be discussed later), and suppliers onboarded (and approved) as soon as all information is completed and reviewed. Once a supplier is onboarded, it’s quick and easy to access all of this information and maintain it going forward.
One differentiating feature of the supplier information management module is that the supplier suitability score for specific products and services is continually assessed through supplier responses to the buyer’s form-based questions using the company’s pre-defined weighted criteria. This score, while providing insights to the buyer during the onboarding process, is kept continuously updated through subsequent sourcing events, contracts and addendums, and development projects.
Moving on to the relationship management, that is primarily accomplished through Action Management, where a user can make a CAPA (Corrective Action/Preventive Action) request, assign an owner/reviewer, send the request to the supplier, and then evaluate and either accept or reject the response from the supplier. A request consists of defining information (name, reason, category, supplier, product, required completion date), a detailed overview of the problem and the resolution needed, any associated (e-)documentation (which could consist of multimedia files), and the log of all accesses/activity on the action. It’s also really easy to search for actions, which can be queried by id, name, status, category, supplier, assigned supplier rep, assigned team member, reason (which is limited to a standard list, which the buying organization can configure in the company settings upon implementation), date range, and/or success status. It’s also easy to use this capability to find all actions associated with a supplier, product, or individual, by status.
Moving on to performance management, it’s specifically survey and KPI-based performance management. At the present time, they don’t integrate with third party data feeds to automatically bring in data that can be used to automatically compute KPIs such as on time delivery / average delivery time, average response time, defect rate (based on returns), etc. Thus, if you want this data included in a supplier performance scorecard, you have to define the KPI you want and the organization user who is going to provide it. But once the KPIs are defined, the relevant organizational users can be identified to either fill out (or validate) the data (if you are asking the supplier to provide metrics) and then you can see a summary by supplier in the performance management area or see a summary across suppliers / products / categories in the reporting section (which will be addressed later). Note that evaluations, and KPIs, can be defined for arbitrary periods, which means that you can collect and track KPIs over time (and the ability to display and analyze those trends in the reporting section is on the roadmap for 2024).
The platform also contains a section for ESG Management, but it’s just a named section for collecting surveys and centralizing KPIs related to ESG. It doesn’t specifically address Scope 2/3 carbon, integrate with third party data feeds (with audited data), or provide ESG best practices. In other words, it doesn’t contain any unique capabilities. However, for many firms that need to track ESG data from suppliers / for their associated products, it’s great to have a separate named section. Plus, Promena is in the process of integrating with third-party data providers to enhance data-driven decision-making and when those integrations are launched in 2024, the data will appear in this section (assuming the buyer licenses the appropriate data subscriptions).
Moving on to reporting, while the platform does not contain a full self-serve reporting engine or spend analysis capability, it does have a number of built-in drill-down dashboard reports built in Qlik Sense that provide the users with a lot of information. Standard reports (and more can be built by Promena or their partners using services) include Project Reports (across sourcing events) and Event (RFX/e-Auctions) reports, SRM reports (on supplier statistics, participation and performance), and Contract Reports. There are also reports on POs (for the purchase order capability we’ll define soon), and the ability to drill down to REQs (data related to individual purchase requests, which we’ll discuss later). When we say Project or Event reports, we mean that each of these groups contain one or more sub-reports (pages) that a user can drill into. For events, this includes category analysis, participant analysis, auction analysis, RFQ analysis, and authorized person analysis. Similar breakdowns exist for other reporting areas.
This more-or-less completes coverage of their Source-to-Contract capability, with the exception of configuration settings (that will be discussed later), so now we will move onto e-Procurement.
The first capability we will overview is the product management capability of the Promena platform. Within the platform, the buying organization can define its own category hierarchy, and once this is defined, an organization can define the products and services it needs (and buys) across the category hierarchy. Products can have all necessary meta data information (name, id, units, dimensions, etc.) along with associated prices by supplier, which can be defined for individual time frames (so if a contract has price escalation or de-escalation, the price table can be adequately captured), and images. The latter is important because the platform also supports catalogs.
The catalog functionality makes it easy for organizational end-users to purchase standard, approved, on-contract, products and services they need to do their daily jobs (such as office supplies, MRO, and repair services). The catalog functionality is standard and straight forward. A user can select a sub-catalog by supplier or category or simply search the integrated catalog (maintained by the buying department, it is not a supplier maintained catalog) by description or product number/code. When the user finds what they want, they can define a quantity and add it to a cart. Once they’ve found everything they want, they can “checkout” which will automatically create a PO and send it to the associated supplier(s) by default. Alternatively, if they are requesting a large quantity, they can create a REQuistion and send it to the supplier(s) who offer the product in hopes of getting a better price quote. When the REQuisition is returned, if the user accepts, it can be converted to a Purchase Order.
Purchase orders complete Promena’s e-Procurement capability. Purchase orders basically consist of order information against a catalog item, REQ, sourcing event (RFX, e-Auction) award, or contract and allow an organization to track orders, and spend, in the platform. This is useful because, for every category, the organization can define a budget, the platform can track PO-based spend against that budget, and prevent a PO from being issued (using rule configurations) without approval if the budget would be exceeded.
The final capability of the platform is the (self-service) configuration for user and platform management. We’ll start with platform management. The buying organization administrator(s) can define general company information, approved users, locations (for shipments from POs), organizational structure, default organizational currencies (which can be associated with different levels of the organization), units of measures (metric system used), standard organizational payment terms (for awards and POs), inco terms, any additional terms to be included in POs (such as delivery, invoice requirements, etc.), account codes for products and services, their category hierarchy, their cost centers, event settings, supplier search/internal discovery settings, and approval flows (for award creation from RFXs and e-Auctions, supplier onboarding, contracts, actions, REQs, and Purchase Orders). User definition is simply the user, organizational profile, and their platform roles (and thus permissions). Finally, the company settings area displays the Promena platform license the organization has acquired and when it renews (or expires).
Finally, while this is not platform related, we should also point out that Promena offers on-demand professional services. While the buyer can use the platform as a self-service solution, they can engage the Promena Account team to take over and manage end-to end sourcing activities on their behalf at any time. Their account teams currently manage more than 5,000 sourcing activities a year.
While you may not find anything truly unique in the Promena platform if you compare it to high end suites (which come with high-end seven figure price tags), it’s a very solid platform for mid-market enterprises and one where the entirety of the source-to-pay workflow that is supported is tightly integrated, easy to use, and affordably priced (and supported, with 10 global partners for integration and support services). Given that there are only a few such platforms out there (due to all the M&A activity in the later part of the teens), Promena’s global expansion is definitely a welcome addition to the marketplace.
