Category Archives: RFX

Are You Ready to Leave the Procurement Dark Ages? ScoutRFP Has a Simple Tool For You. Part I

In yesterday’s post we noted that even though the Procurement profession has went from zero to hero in those leading organizations that were forward looking enough to let Purchasers gain influence in both the inbound and outbound supply chain and raise the profile of the organization in the eyes of both customers and suppliers, it is still only a select group of leaders that have truly embraced Supply Management and leaped the pond.

The remaining organizations are still in the Procurement Dark Ages, conducting procurement using the age-old three-bids-and-a-buy technique and the fax machine running over a 64 kbit digital ISDN circuit. And, especially in the lower end of the mid-market, this is the norm and not the exception.

To this end, a new company has hit the Procurement Technology marketplace focussing only on RFX. That’s right, RFX. You’d think that the market would be saturated by now, given that RFX solutions have been on the market for a decade and a half, but it isn’t. There are a number of reasons for this:

1.As described above, a lack of foresight and faith in Procurement has held Procurement, and Procurement technology, back in a number of organizations.

2. The high price tag that was associated with such technology in the past. This technology used to be six figure technology. It’s far from that today, but when many companies first investigated this technology, they got such a sticker shock that they decided it would be out of their reach for years, if not decades, as used to be the case with MRP and ERP technology.

3. The complexity of the suite of products that were often forced upon them. A number of early Sourcing and Procurement Technology providers tried to sell entire suites, insisting that individual products were not valuable on their own, and most companies, still using phone and fax, were not ready for the breadth of technology being thrust upon them and so retreated to their dungeons.

The companies at the low-end of the technology and innovation spectrum need to take things one step at a time, and get comfortable with basic technology solutions, like RFX, before moving on to auction and spend analysis and even, if we’re lucky, optimization. And they want to be able to acquire these solutions one at a time.

That’s why Scout RFP has launched a new RFX solution that attempts to provide these companies with a simple, starting, technology solution that these companies can use to dip their toe in the modern age of Procurement at a low cost with little to no risk.

Is it needed? Is it worth it? Stay Tuned for Part II.

MarketMaker4: The Mid-Market’s Market Making Mezzanine

Some of you might say the e-Sourcing space is too crowded. And that certainly was the case in the mid-zeroes — platforms here, platforms there, platforms platforms everywhere. But then came the acquisition frenzy where mid-sized players swallowed smaller players and start-ups before getting swallowed up in turn by the dominant players who, in the last couple of years, themselves were swallowed up by the massive enterprise software providers. As a result, there is an opportunity, especially in the NA (North American) market for a couple of new players – provided, of course, that such players bring new and innovative solutions to the table (that address the needs of a considerable market segment).

As a result, even though the EU (European Union) vendors are starting to enter the sourcing market in a big(ger) way in NA, there is still an opportunity for someone new if they go about it the right way. So, despite the fact that many thought the market almost dead at the end of the zeroes, it was not completely crazy that a small team of e-Sourcing market veterans, including Mr. Alan Buxton who was the CTO of of Trading Partners back in their heyday, decided in 2011 to start a brand new e-Sourcing software start-up and build a new solution from scratch.

Two years later, MarketMaker4 is a strong offering for the mid-market that needs a new, modern, e-Sourcing solution. In particular, those mid-market companies that are late to the e-Sourcing game, those that are still relying on third parties to manage their sourcing events and are ready to bring those events in house, those that are trying to use ERP sourcing solutions, and those stuck on platforms that, due to acquisition, are stuck in integration limbo and haven’t been upgraded in a while.

So what is MarketMaker4? It’s a four-part sourcing solution that consists of:

  1. A modern e-Negotiation platform
    with a best of breed e-Auction and RFX solution
  2. with a built in supplier discovery engine
    built on the entire D&B database which is augmented with your own supplier database
  3. and market data indices that span commodities and currencies
    that let a buyer know current prices, historical trends, and relative market conditions (when the data is available)
  4. that is augmented with real-time product and sourcing support 24/7/365
    through online chat that connects all of the global support representatives around the world that are currently online.

The MarketMaker4 founders, who were involved in the space for over a decade and who worked for both software providers and services providers learned the following:

  1. While some companies will start with services to get going, these companies will eventually decide that pay per drink is expensive and look for software.
  2. The companies switching from services to software will typically select a best-of-breed software provider with little or no services or support beyond the product. As a result, due to limited sourcing and product knowledge on the in-house buying team, the product typically gets under-utilized and the company fails to achieve the ROI they expected.
  3. When the license expires, the company will typically revert back to a pay-per-drink, but limited to high-value categories, or put its faith in a good e-Procurement system, that will reduce maverick buying and, hopefully, with limited RFX capability, lead to better buying habits.
  4. But even if the company moves to a modern e-Procurement system, the company will typically have little insight into current prices or suppliers that they aren’t already buying from.

As a result, the team decided what was really needed for these types of companies was:

  • An e-Sourcing solution that was easy to use by the average buyer,
  • augmented with real-time support and guidance as new buyers get up to speed,
  • integrated with market index and currency index data (that could be linked into cost models), displayed in easy to understand graphical representations, that the buyer could use to understand current prices and likely trends, and
  • extended with a huge database of potential suppliers.

And that’s what they built. And in each component, they added some innovation to the mix.

  • The e-Auction product, which consumerizes the enterprise capability, is one of the most powerful on the market, with one of the most sophisticated, but yet easy to understand at a glance, interfaces out there.
  • While chat-based, they chose to build a support solution that connects all of their services and support personnel around the world who are currently available rather than use a call-center model. (And as they were just acquired by Xchanging, one of the big players in the Procurement market who are leaving MarketMaker4 as a stand-alone product and company, they now have a large network of support personnel around the world who speak multiple languages and can support their customers in their native language.)
  • Their market index solution is linked into the RFX/Auction module so that the buyer can see current component / raw material prices if there is a market index and can see current currency values as well as trends over the last year for every currency a supplier might bid in.
  • And they were the first e-Sourcing platform to integrate with D&B for the purposes of supplier discovery. Up until they did, most integrations were for risk data or data enrichment. As a result of their partnership and early efforts, they have one of the more powerful integrations and in addition to being able to search on name, location, etc. they can also filter on a variety of dimensions, including risk, size, diversity, etc. that even D&B can not filter on through their API.

MarketMaker4’s e-Auction product and supplier discovery products in particular are quite innovative, and SI will dive into them in more detail in the new year.

IQNavigator Navigates You Through Statement of Work Creation

Since we last covered IQNavigator and their IQ-based Navigation of Contingent Labour Sourcing in 2008, IQNavigator has been hard at work extending their platform and its capabilities to go beyond temporary and contingent labour and also handle project and SOW (Statement-of-Work) sourcing events and the full SOW life-cycle.

Project and SOW sourcing projects, even if they consist primarily of contingent labour, are different from standard contingent labour sourcing events in that a third party is managing the project, payments are (typically) on a different schedule and have to be tracked against a budget, and named resources need to be tracked. The entire process, from RFX, through contract generation and award, to project management and delivery is different.

The customizations in the IQNavigator platform start with the initial RFX creation, which begins with a wizard-based decision-tree workflow. This Decision Manager is customizable by the organization for each type of SOW project that it undertakes, that, based on a series of questions, will configure the proper RFX for the project in question. This series of questions (that can be customized by each client organization), which could be as simple as asking the user to identify the location where the services are required, the category of the work (IT, engineering, advertising, etc.), the length of the project, the expected budget (range) required, and the approvals required, will, once completed, initiate an RFX workflow that will incorporate the necessary elements of the SOW project. The Decision Manager solution was designed to focus on two things:

  1. Delivering the end user to the correct channel (or category) based on Procurement’s operational and/or vendor preferences and
  2. Placing the end user at the optimal point of the defined category workflow based on the end user’s responses

Depending on the answers given, the RFX will include sections for the definition of milestones, budgets, rate tables, (open) supplier selection, support for named resources, questionnaires, and / or required submissions (such as insurance certificates) from the supplier to be considered for the project. The user will then be walked through the definition of the RFX for the SOW project step-by-step (by way of a pre-configured RFX or SOW template).

Milestones are up to the individual who creates the project, can be tied to a budget line item, and associated with one or more deliverables. Budgets can be as simple as an overall budget for the project, or as detailed as a budget category for each deliverable associated with each milestone (if the project is being paid for on a deliverable basis) or by (named) resource if the project is being conducted on a time-and-materials basis.

Suppliers can quickly be selected from a drop-down search box if the organization has (pre)approved suppliers for the SOW project in question, and if the suppliers have provided rate tables, these rate tables can be automatically pulled in and presented back to the supplier (to verify) during their bid. In addition, if the supplier has previously specified named resources, these named resources can be pre-populated as well. Depending on the project, they buyer may also have the option to add additional suppliers (which will be invited to bid on the project as well).

Questionnaires can also be selected from a set of standard pre-existing questionnaires associated with the type of project being sourced. They can be distributed as-is or modified as required. In addition, the user can create their own questionnaire if one doesn’t exist that fits the bill.

When the RFX is complete to the user’s satisfaction, it is sent to the supplier who logs in and completes a bid to their satisfaction. If the supplier has already defined their rate tables and named resources and uploaded their insurance certificates, bidding on the project by the supplier could be as simple as identifying the resources who will complete the work, providing work estimates and proposed fees, and accepting the (automatically calculated) budget.

When all of the supplier responses have been obtained, the buyer, who can choose to analyze each response individually, can also evaluate the responses side by side in a comparison report that includes the (budget) elements of interest and then select one of the responses as the basis of a project award. At this point, the application can generate a draft contract based upon a template that pulls in all of the collected information, and includes any necessary documents in appendices. And if the supplier has signed a MSA (Master Services Agreement) with the buyer that authorizes password-based named-login approvals in the IQNavigator SOW platform as e-Signatures, the contract can be accepted online and work can begin immediately.

The entire SOW application is streamlined to make the sourcing and approval of SOW projects as easy as possible for the project manager, while incorporating as many best practices as possible, which allows the project manager to focus her time on what she does best — managing projects and not running sourcing events.

Then, once the SOW project has been awarded, the project manager can use the rest of the IQNavigator platform to track project progress against milestones, collect time sheets, approve time sheets and expenditures, make payments against project budget categories, and track overall supplier performance. The reporting engine can be used to run reports at any time and the dashboard can be used to monitor current action items and outstanding project milestones and deliverables.

The inclusion of SOW capability makes IQNavigator an end-to-end platform for managing all types of contingent labour required by your organization, whether such labour is managed in house or by a third party. The IQNaviagor approach to SOW is unique, and it is the most thorough solution for generic SOW sourcing events in a contingent labour solution that SI has seen to date.
The IQNavigator platform is a great way to get all of your labour-based spend under management in one platform.

iValua: Proving Their Mettle with Source to Settle, Part II

Yesterday, in Part I, we noted that when we last covered iValua in 2010, they were one of the few providers tackling end-to-end sourcing and procurement in a single suite of integrated modules built on one common platform. We noted in Tackling End-to-End Sourcing and Procurement, Part I that this French company had capabilities that, at least to some degree, addressed each of the core phases of the basic sourcing-and-procurement cycle except decision optimization and tax reclamation. Since then, they have added advanced tax tracking capability, and a boatload of other features that include SIM/SPM, Risk Management, Project Management, Enhanced Analytics, and Extensive UI customization. Today, we will continue our coverage of the platform, which includes a module for Supplier Management, that we covered in Part I; Sourcing, Contract Management, and Catalog Management, that we’ll cover today; and Procurement, Invoice Management, Expense Management, Reporting, and Administration that will be covered in the remainder of the series.

Sourcing

Sourcing consists of sourcing project creation, schedule and workflow creation, RFX, and e-Auctions. As noted above, there is no decision optimization, but that is literally all that is missing in their sourcing module.

Project creation in iValua is very powerful as you can not only define the project, but set up the end-to-end workflow, define a schedule, assign team members, and track every step. A project has an identity which captures basic project information, associated documents, a sequence of tasks or actions that will fulfill the project, an assigned team, a schedule, and a forum where team members can collaborate and discuss issues. The tasks and actions supported are quite extensive – and include all of the standard source-to-settle steps such as requirements gathering, supplier selection, RFX preparation, response tracking, proposal evaluation, response analysis, award, and contract. From each task, the users can jump off to the appropriate module in the iValua suite to complete the task. The workflow engine is quite fine-grained.

Contract Management

Contract Management is the creation and management of contract templates, contracts, and signature transactions for e-signing. The gem here is iValua’s online drag-and-drop contract creation capability (with complete audit trail functionality) that works in the browser and fully integrates with Microsoft Word. The view, which has the section index on the left, the section texts on the right (each in their own editable box), and Word-compatible editing options on the top, makes it really easy to construct a contract. The tabs allow for quick access of the header, the team involved in the process, deadline (and auto-renewal) dates, exhibits, main clauses, items and services, negotiated terms, the associated contract scorecard, and the current status of the contract with respect to the defined lifecycle.

Catalog Management

Catalog Management is the process of importing catalogs, creating and managing catalog items, and managing services procurement. Catalog management works as you would expect, and the hidden gem in here is the extensive services procurement management capability, including timesheet capability. The services procurement module allowed for the creation of services profiles (like templates for services requisitions), price structures, and requisitions — which could be fee-based or timesheet-based. The platform has extensive support for services requisitions, and the unique requirements for services requisitions, that require proposed delivery details, schedules, proposed team members, rates, payment schedules, and insurance requirements. It’s not quite as extensive as the capabilities in the Contingent Workforce Management platforms (like FieldGlass) or Agency Lifecycle Management platforms (like DecideWare), but is more than sufficient for the majority of services-based sourcing projects that a typical Supply Management organization will need to address. It is definitely the 80% solution.

We’ll cover the remaining parts of the platform in the remainder of this series. Come back tomorrow!

It’s 24/7 for Robbie and the Coupa Factory, Part III

In Part I we announced that Coupa has been coding up a storm since we last checked in on them last summer (in Robbie and the Coupa Factory), completing Release 9 with major enhancements in expense management, invoice management, and catalog management; the android app; and the first version of their new sourcing module as well as some major improvements to their cart that will show up in release 10 later this quarter. In Part II, we discussed the major improvements in Release 9 around expense management, invoicing, and catalog management. Today we will discuss the new e-Sourcing module and how it makes Coupa one of the first providers to offer an integrated end-to-end e-Sourcing and e-Procurement solution.

The new Sourcing Module is e-Sourcing 1.0. RFPs, RFQs, RFIs, basic reverse e-Auctions, and basic e-Sourcing project management form the foundations of the new suite, which, to be honest, is not much more than you’d find in any e-Sourcing suite on the market, including the free WhyAbe solution available from SourceOne, but that’s not the point. The point is that the inclusion of this module in the Coupa platform makes Coupa, as far as SI can tell, the first Supply Management provider based in North America with an integrated end-to-end Sourcing and Procurement platform. SI has been saying for years that It’s Sourcing AND Procurement and that the only way to truly revolutionize Supply Management is to have one integrated end-to-end platform, and with Coupa’s current offering, with the exception of Decision Optimization (which is only critical for high(er)-dollar (complex) spend in an average organization just starting their e-Sourcing journey), the platform has the foundations of the remaining four stages of e-Sourcing and nine stages of e-Procurement. Some applications, like Spend Analysis, Contract Management, and Tax Reclamation have a ways to go (as tax codes outside North America can get quite complex), but the point is that there is a foundation that allows the entire process to be e-Managed. End-to-end projects can be created that follow the process from cradle (the initial RFI) to grave (when the final order is shipped, received, invoiced, reconciled, paid, and added to the Spend Under Management database for analysis).

Moreover, the entire process can be made available to every user of the platform. While complex sourcing events need to be driven by senior buyers, there is no reason that simple events for simple commodities or services needed by only one department can’t be driven by a senior person in that department, under the supervision of the appropriate Manager or Director. Why should Supply Management oversee every single sourcing event for temporary labour for a system implementation? If there are approved suppliers, approved budgets, and known requirements, there is no reason that a domain expert can’t drive the project with the help of Supply Management, if required. And if the spend for these one-time projects exceeds a threshold, which will be easily detected if budgets are exceeded or reports show significant spend in a given category, then the category can be the next Supply Management sourcing opportunity.

The sourcing module is as easy to use as the rest of the platform, and sourcing events can be created just as quickly as requisitions can be created. RFXs can have as little or as much content as is required; one or more questionnaires can be attached to get information about finances, supplier capabilities, insurance, Corporate Social Responsibility, etc.; an e-Auction can be triggered from an RFX (and initial bids imported); an award can be pushed into the contract management system and the catalog populated; requisitions can be created against the budget associated with the contract and the catalog items; purchase orders can be created on requisition approval; good receipts can be accepted and tracked against requisitions; invoices can be automatically correlated with the purchase orders; and payment approvals can be automatically submitted to your e-Payment system. It’s end-to-end automation of the tactical process, freeing you up for the strategic work.

It’s a great step in the right direction. While Coupa‘s e-Sourcing suite is still at least two versions behind what is being offered by the large e-Sourcing suppliers, it’s the perfect solution for a mid-size organization that doesn’t have a sourcing solution or a current Coupa customer that doesn’t have a widely used sourcing platform due to cost or personnel restrictions. It’s a step in the right direction, and one that is sure to keep the big sourcing providers on their toes, as the big sourcing providers will have to keep innovating to keep two steps ahead of this fast-moving SaaS company.