Category Archives: SaaS

A New Year is Upon Us – Do You Have Your SpendHQ Ready To Go? Part II

Yesterday we introduced you to SpendHQ, one of the strongest players in the spend visibility and analysis space from a software and services solution viewpoint. Unlike most spend analysis solutions that were designed and built by sourcing solution providers, SpendHQ was designed by sourcing and spend experts and implemented by a development team experienced in the implementation, and integration, of sourcing solutions.

In today’s post we are going to dive into the visibility module. The goal of the visibility module is to help the sourcing team, and the C-suite, get a handle on what the organization is spending over time (by quarter, month, or year — depending on the amount, and granularity, of the data available). The SpendHQ solution does this by pre-constructing a spend cube tailored to organizational needs and providing an interface that can drill into any level of detail, on the dimensions of relevance, and filter out any data items of interest, or non-interest, along any dimension. The solution then presents the data in a very easy to understand graphical display that is designed to be focussed on the most relevant items of interest, and only the most relevant items of interest. In the SpendHQ solution, no screen has more than three graphs. The designers, which have experience with a number of sourcing and spend products and associated dashboards, have found that any more than three graphs on a screen not only clutters the UI, but often distracts the decision makers from the most relevant data (which leads to more time spent analyzing the wrong data and less time focussed on what really matters from a savings perspective). This does not limit the usefulness of the product in any way as another key feature is that every screen tells you exactly where you are in a drill down as well as what filters have been applied. Furthermore, a user can always jump back up to any level or down to the bottom (using a pre-defined saved filter) and every piece of data is selectable and filterable dynamically. (So, even though the user only gets one cube, the user can extract any subset of that cube and view it along the dimensions of the user’s choice.) Plus, the current view, and all of the data behind it, can always be extracted to an Excel spreadsheet at any time (which makes it easy for the user to build reports, verify analysis, and load it into the supply management software of their choice for subsequent event execution and tracking).

The visibility product has six main components: home (the spend-trend dashboard), details, compare, compliance, reports, and tools.

The spend-trend home dashboard displays a spend trend graph for the default (but changeable) date range by month, broken down by category, the total spend, and the total number of vendors who contributed to that spend. From here, a user can drill into the relevant categories. Selecting a category brings up a screen with the spend for the category, broken into sub-categories.

The details section breaks the spending down by category and vendor, allowing the user to see trends by selected categories and subcategories, and, if desired, restrict that view to a select group of vendors.

The compliance section allows the user to quickly determine how much spend is being managed relative to the total organizational spend and how much of that managed spend is compliant. This allows the organization to not only determine the compliance rate, but the impact rate — which is the amount of compliant total addressable spend. This section is broken down into an overview section, a managed spend section, an unmanaged spend section, and a Rogue’s Gallery (TM) that summarizes the top unmanaged categories and the top non-compliant subcategories so that a spend manager can quickly zero-in on the biggest offenders with respect to compliance, and generate a list of the top locations, departments, and buyers.

The reports section allows the buyer to quickly access standard and pre-defined reports and the tools section allows the buyer to define their configuration options.

One of the unique features of the application is the Power Filter that allows a user to quickly select the spend range, dimensions of interest, and the relevant items as well as filter out the sub-dimensions and even line items of non-interest. With this tool, even the most novice of users can quickly slice and dice out just the data of interest to them. The user can save any and all filters of interest and (re) apply them at any time.

It’s not only a powerful spend visibility solution, but a very useable one. If your company is a mid-market company without a (useable) spend analysis or visibility solution that needs to get one up and running quickly, accurately, and usefully, take a very close look at SpendHQ. It’s a great starting point on your spend visibility and analysis journey.

A New Year is Upon Us – Do You Have Your SpendHQ Ready To Go? Part I

As SI outlines in its upcoming white paper on the Top Ten Transitions To Tackle in 2014 to Tame the Tolls, hyper-inflation is just around the corner, logistics capacity is on the rise (just like the cost of transportation), and working capital management is still lagging. If you put it all together, costs could rise out of control while millions of dollars sit tied up unnecessarily. The only way to avert this impending disaster is to take proactive action and get your spend, and spend management, under control.

In order to do this, you need good spend visibility — and, if you are not an expert in spend visibility or spend analysis, you need visibility that you can use and that is graphical, categorized, and relevant to your spend management needs. Furthermore, if you do not have technical skills (in house), you need services that can help you normalize, integrate, categorize, and cleanse your data. And if you don’t know where to start once you have the data categorized, normalized, and cubed for analysis, you need category expertise and consulting services.

If you are in one of these groups, up until recently there were essentially no solution options for you to choose from and even now, there aren’t that many. Furthermore, most of the solutions on the market that are available to you today, with only a handful of notable exceptions that you can count on your fingers (without your thumbs), fall into either the category of solution or service, but not both. However, for those of you that need an option that provides a full-service solution that includes data integration and category expert consulting, an often overlooked solution (that has been under continuous development for almost a decade) is about to make a big splash in the Spend Analysis and Visibility space.

That solution is SpendHQ. What started out as an internally developed tool to help Insight Sourcing Group (ISG) achieve the visibility they needed to help them drive savings for their clients, was transformed into a basic commercial software solution in 2007 for a select group of marquis clients to help those clients track spend and associated savings. Since then, ISG has spun off the product into an independent business unit which recently added new team members with commercial product development expertise from leading sourcing and spend analysis solution companies. This new business unit has been dedicated to improving and extending the tool for the last three years in quarterly product releases.

The solution has grown from a simple spend reporting tool into a fully featured spend visibility tool that tracks all of your spend over time — by category, department, and user; a category management tool that lets you dive into category spend and filter down to the items of interest, see managed vs unmanaged spend, and track compliance; and, as of the next release later this quarter, track contract meta data and do basic contract lifecycle management. In addition, the services component has matured and the organization can quickly import, merge, classify, and cleanse all of the relevant data from whatever ERP, AP, or Procurement systems you happen to be using and refresh this data for you as often as every week, although SpendHQ recommends monthly refreshes (even though, for larger clients, quarterly refreshes often suffice). (Their largest client, with 50 Billion in revenue, chooses to only refresh their data quarterly as real-time isn’t all that relevant where spend analysis is concerned.) Plus, SpendHQ can also integrate supplier data feeds for verification and enrichment and currently integrates with a number of office supplies vendors out-of-the-box.

While not the most powerful (ad-hoc) spend analysis solution on the market, it’s a really great solution for a mid-market company without a (useable) spend analysis or visibility solution that needs to get one up and running quickly, accurately, and usefully (as the solution has more power and capabilities than the average company needs to get great results). Within 4-6 weeks, a company with no spend analysis capability can be up and running 100% and be making useful, informed decisions. In the next two parts, we will dive into the visibility and analysis capabilities of SpendHQ as well as the category management capabilities.

The Best Supply Chain Security in the World is Useless …

… if you forget to lock the digital back door!

As Tim Garcia pointed out in a recent article over on Manufacturing Business Technology, “In Securing Your Supply Chain, Don’t Forget To Lock The Back Door”, because up to half of all reported company data breaches slip in through unguarded digital back doors. Just because you take all of the security precautions that are possible with your own network, this doesn’t mean that you can account for the practices of other companies your enterprise interacts with on a daily basis though digital backdoors that could be contained in every piece of enterprise technology that you use.

So what should you do? For starters, follow the advice in Tim’s article.

  1. Use up-to-date anti-virus and monitoring systems on all inbound and outbound connections.
    Whether it is between business systems at different locations, your SaaS and cloud providers, or third parties — protect all data links.
  2. Restrict all sensitive digital communications and transactions to secure, monitored, channels.
    Don’t allow sensitive data or monetary transactions to flow over unapproved, unsecured channels for any reason.
  3. Analyze every nook and cranny in your digital supply chain for vulnerability.
    Thieves and competitors will find the one digital pathway you miss or ignore in your vulnerability assessment.
  4. Communicate the Security Procedures and Protocols
    Make sure the entire C-Suite is aware, approves, and communicates them downward.
  5. Have a Recovery Plan
    Despite you best efforts, it only takes one newly discovered zero-day exploit or one employee who forgets to encrypt some critical data for thieves and spies to break into your network, steal your data (and your customers’ data), and put you in a bind. Have a plan to deal with the worst-case scenario as soon as it happens to minimize the losses to your bank account and your corporate reputation.

In addition, SI recommends

  1. Have harsh penalties for (repeat) offenders who do not follow the procedures.
    Just like some employees will continue to buy off-contract unless you have harsh penalties in place to curb this behaviour (such as no reimbursement without an approved PO signed by their supervisor and a Procurement executive, write-ups that negatively impact their performance review and maximum bonus, etc.), some employees will take shortcuts if they think its easier or quicker to do so or the security procedures are overkill.
  2. Look for systems where you can control the distribution of data seen by your suppliers.
    If the only way to restrict the data that is viewable by a user logged into one of your systems is to export it to Excel or PDF, and this is the primary mechanism used to share data with your suppliers, even if it’s sent encrypted, once the supplier decrypts it – you have no control. If, on the other hand, the system implements fine-grained security and you can create customized supplier views and restrict data exports, this limits what the supplier sees and its options for sharing that data. It’s even better if the supplier can create customized sub-views for the data it needs to share with one of its suppliers working on a part of the component it is building for you. Even though the military often goes crazy with its security measures (as anything on the public internet is not “protected” just because you print it off and put it in a binder), they have the right idea — sensitive data that is sent outside the four walls of the organization should be restricted to what is need to know.

Good SaaS vs. Bad SaaS

A recent post over on Richard Anson’s blog on “11 Crucial Tactics for SaaS Pricing”, while written for new SaaS vendors who need to know how to price their solutions, did a great job of helping to point out some of the key elements of a good SaaS solution sales process vs. a bad SaaS solution sales process as well as some key elements of a good SaaS solution from a customer’s perspective vs. a bad SaaS solution from a customer’s perspective.

In particular, it focusses in on some of the key non-functional characteristics that should be examined in your SaaS purchase process. These non-functional characteristics can easily be summarized in a quick side-by-side comparison of good SaaS vs. bad SaaS.

 

Good SaaS Bad SaaS
Value-based Cost-based
ROI-justification Process Improvement
Business Case Justification Potential Manpower Reduction
Priced According to Company Size and Utilization One Price Fits All
Competitively Priced Priced Out of the Ballpark

 

In other words, if the SaaS solution is good, it will be competitively priced, and priced according to your company size and intended utilization, come with a business case justification, deliver a proven ROI, and clearly deliver ongoing value.

And if a SaaS solution is bad (for you), it will be priced out of the ball-park with respect to its competition (and be either too expensive to deliver value or too cheap for the company to sustain over the long term, which will lead either to the provider’s failure or substantial price increases at contract renewal time), have little in the way of a solid business case justification, or have a poor ROI over the short and/or long term. SaaS is more than features, functionality, hands-off management, and a cool web experience — it’s about delivering value to your bottom line.

For insights on how to cost out the TCO of a SaaS solution, and compare that TCO to an installed solution, see SI’s classic post on Uncovering the True Cost of On-Premise Sourcing & Procurement Software. For insights on what constitutes a good SaaS contract, see SI’s classic posts on SaaS Contractual Considerations (Part I and Part II). And remember, as per SI’s recent post on Maximizing ROI from Technology, it doesn’t matter how strategic the IT Vendor is, it only matters how strategic the solution they offer is.

FREIGHTOS: Helping to Bring Freight Into the Modern Era

Freight is often the bane of the Procurement professional, especially when such professional needs a quote in a hurry. It’s not uncommon even in this day and age for a Procurement professional to call up a freight carrier for a spot quote and have to wait two or three days. It’s absurd. Quotes, or at least quotes on standard table rates, should take two or three seconds. The only time you should wait a couple of days for a quote is during a master contract negotiation for hundreds of lanes, as you will want to give the carrier some time to determine their absolute best rate in this situation.

This is the primary reason BuyTruckload.com was founded. The founders, veterans of the logistics management software industry, got fed up with both having to wait for bids on the spot market and being unable to shop the business to enough carriers to get the best rate.  But this isn’t an article about BuyTruckload.com, even though BuyTruckload.com does a wonderful job in North America. Why?  Because BuyTruckload.com it doesn’t solve the global shipping problem, doesn’t address other modes of transit, and it doesn’t account for the fact that you might have contracts in place (that the buyer might not even be aware of).

In order to address this problem and speed up the freight quote time, on or off contract, in the global market place, Zvi Schreiber and his team built FreightOS (pronounced Freight O.S., or even freigh-toss, as it is a freight operating system and not a brand of breakfast cereals), which is an technology platform that enables an on-line network of global freight carriers to provide instant spot-rate and on-contract quotes when a (potential) customer needs them.

When a carrier, or freight-forwarder / 3PL,  signs up for the FreightOS network and uploads their standard rate tables for ocean, air, and land-based shipping for all of the routes they service, customers can access the carrier’s portal on the FrieghtOS network and get almost instantaneous quotes (which, depending on the number of routing options and shipment goal — be it lowest cost, fastest delivery, etc. — could take a few seconds) for the route(s) of their choice. All the buyer has to specify is the origin, the destination, some basic load characteristics (what is being shipped [boxes, pallets, etc.], dimensions, unit weight, and quantity), the desired pick-up date, the allowable modes (land, ocean, air, or any combination), whether or not the load is hazardous, if insurance is required (and the load value if it is), the applicable HS code(s), and if a customs brokerage is being used and click a get quote button. Within 10 seconds, the buyer will get the quickest delivery quote, the cheapest quote, and, if applicable, some suggestions for nearby delivery locations that are quicker or cheaper (especially in the case of inter-continental shipments where there are multiple options that require a multi-modal delivery network that consists of air or ocean and truck or rail). Each quote returned will include the total cost, the time-in-transit, the modes of transportation required, and whether or not the carrier will work with a customs brokerage or transport hazardous material. Clicking on a quote will break it down into its constituent cost components, which may include, but are not limited to, basic freight cost, (airline) screening fees, (airline) security fees, fuel surcharges, documentation fees, (airline) handling fees, export declarations, advance manifest fees, etc. If the buying organization has a contract with the carrier, even if it only covers some lanes, they can upload the contract and all of their buyers can get on-contract quotes instantaneously and compare them to off-contract quotes. This can help the buyer discover whether a different routing can save them some money.

Also, after the buyer has requested quotes from their (preferred) carriers of choice on the FreightOS network, they can download their entire quote history to an excel spreadsheet to not only do a lowest-cost cross-carrier comparison by lane, but determine where the real (hidden) costs are. For example, it’s possible that (one of) the biggest cost(s) (in air freight in particular) is the fuel surcharge, and if the buyer can identify this and negotiate a better fuel surcharge rate with a carrier of choice, they could potentially lower their shipment costs going forward. Also, in the case of exports and imports, a buyer can see if any of the security or documentation fees imposed by one carrier are (unreasonably) higher than the market average.

Right now, the FreightOS platform has approximately 20 carriers on-board, but considering the huge cost savings this represents to a carrier that spends a considerable number of man-hours every day quoting on business for which it knows it will only see a 20% to 30% success rate at best, it shouldn’t be long before more carriers sign up. With this type of platform, no man-hours are needed to provide market-rate quotes and the carrier will know that when they do get a call based on a quote provided by the platform, the buyer has product she needs to ship, has decided that the carrier may be able to provide the service she needs in an acceptable price range, and has narrowed her pool of carrier choices down to select few. The founders of FreightOS believe that they can increase the success rate of their carriers by 10% with this tool, but SI believes that this tool could increase a carrier’s success rate by as much as 50% as most buyer’s will only call, at most, the 3 lowest quoting carriers and select the first carrier that can meet their delivery requirements at an acceptable price.

If you have global freight and need a better quoting solution than calling up a carrier who will take, on average, a day or three to get back to you, SI recommends checking out FreightOS. It’s definitely a platform to watch.