Category Archives: Technology

A Good Negotiation is Key in Technology Acquisition

But whatever you do, please don’t mistake cost savings with value generation. But, as usual, let’s backup.

A recent article over on The Financial Express on the importance of a technology procurement negotiator noted that the art of negotiation has taken on a whole new level of complexity, especially in technology procurement and that discovering the most equitable pricesis a strategic imperative at a time when maximizing returns on investments is paramount.

And this is certainly true, as are most of the other messages in their article. Specifically, such a negotiator must:

  • understand the digital disruption
  • have high intelligence, which must go beyond technical expertise
  • understand the high stakes of technology investments
  • have the personality, worldview, and knowledge to navigate the negotiation beyond the technical aspects
  • be able to reflect on the bigger picture
  • be able to sync with the project

… but the criticality of ensuring that the technology procured provides exceptional value for the money spent cannot be over-emphasized. One cannot understate the importance of understanding the product’s role, functionality, and how it aligns with organisational goals. It doesn’t matter how much you save if the product isn’t the right fit. It’s critically important to not only have the technology experts identify the products that could serve your needs, but the right configurations, the associated services that will be required, and the right partners for the organization.

Additional savings is worthless if it comes at the expense of the vendor removing a key module from the reduced offer, not including necessary implementation or integration services, limiting computing or storage, and so on. If you end up paying significantly more after implementation as a result of change-orders, you not only haven’t saved, but you’ve cost the organization more. This is what often gets missed when negotiators lead. While the eventual owners shouldn’t lead, as they’ll always go with their top ranked provider (even if three systems can do the job equally well, and it’s just a preference as to which system is easiest to use), if they’re not kept in lock stop, it’s easy to miss key details or requirements or stray away from what is truly needed for value generation and ROI in the search for the ultimate deal. This is especially true if the negotiator brings a new vendor in at the last minute for price pressure, believing the new vendor, if not perfect, meets all the key requirements, when in reality the vendor’s platform doesn’t.

This is especially important to remember in SaaS negotiations, where it’s common knowledge that most organizations that buy without using a skilled negotiator are overpaying by an average of 30% or more. This is because an average negotiator’s inclination is to drive for massive discounts to prevent overspend, which might result in not only choosing the less optimal vendor, but the less optimal agreement. At the end of the day, price matters, but ROI matters more, especially in Procurement where the right solution will generate a 5X ROI or more and the wrong solution will barely pay for itself.

Keelvar: Not satisfied with the hill, it’s trying to climb the mountain!

The last time we covered Keelvar on Sourcing Innovation was back in 2016 when we re-introduced Keelvar: An Optimization-Backed Sourcing Platform because it was The Little Engine that Could. (It’s last deep dive on Spend Matters was also in 2016, in Jason Busch’s 3-part Vendor Analysis that the doctor consulted on, which can be found linked here in Part 1, Part 2, and Part 3: subscription required. With subscription, you can also check out the What Makes It Great Solution Map Analysis.)

Since our last update, Keelvar has made considerable progress in a number of areas, but of particular relevance are:

  1. total cost modelling
  2. constraint definition for its optimization
  3. workflow-based event automation
  4. usability

After a basic overview of the software, the above four improvements are what we are going to focus on in this article as it is the most relevant to sourcing-based cost savings identification.

Keelvar is an optimization-backed sourcing platform (for RFQs and Auctions) that can also support extensive sourcing automation, especially once a full-fledged sourcing event has been run and a template already exists (and approved suppliers have already been defined). We will start with a review of the sourcing platform.

The sourcing platform is designed to walk a user through a sourcing event step-by-step. Keelvar uses a 7-stage sourcing workflow that they break down as follows:

  1. Design: This is where the event is defined. In this stage you define the meta information (id, name, description, contacts, etc.), the schedule, the RFI, the bid sheet (as the application supports export to/import from Excel for Suppliers who can’t figure out how to use anything except Excel), the cost calculation per unit (for analysis, optimization, and reporting), and basic event settings, especially if using an auction.
  2. Invite: This is where you select suppliers for invitation.
  3. Publish: This is where you review the design and invite list and launch it.
  4. Bid: This is the bidding phase where suppliers place bids. The buyer can see bids as they come in, get reports on activity, and manage the event as needed (extend the deadline, answer questions, and distribute the responses to all suppliers).
  5. Evaluate: This is where the mathematical magic happens. In this step you define item/lot groups, bidder groups, and scenarios. (You need to define groups for risk mitigation and quality constraints, which are impossible to define in the platform otherwise.) Scenarios allow you to find the lowest cost options under different business rules, constraints, and goals.
  6. Analyze: This is where the user can apply detailed analytics across bids and scenarios to see the differences, gaps, supplier ranks, etc. in tabular or visual formats; do detailed analysis on the individual scenarios to understand what is driving the cost or the award; and even analyze the potential awards against RFI criteria submitted by the suppliers.
  7. Award: After doing the analysis and making their decision, this is where the buyer makes their award from either a solved scenario or a manual allocation.

So now that the basics are out of the way, let’s talk about total cost modelling. As per our summary above, that starts with the bid sheet. Either in the platform, or, if you prefer, in Excel, you can define all of the cost components of interest (and even upload starting bid values from the current I2P/AP system and/or previous bid sheets). If you have an Excel sheet that breaks down the bid elements you want to collect, and the totals you want, in columnar format, with enough sample rows, you can just upload it and the platform will not only differentiate the raw data columns from the bidder columns, and map your column names to internal, mandatory, defined columns (for items, lanes, etc.), but differentiate purchaser input columns (such as destination city, country, service/product, etc.) from bidder columns (origin city, country, lane cost, unit cost, tariffs/taxes, etc), differentiate raw columns from formulas, extract the formulas, and even determine default visibility to the bidder (who won’t see the formulas, especially if hidden offsets or weightings are used). The user can, of course, correct and override anything if needed, but for each sheet process, the application learns the mappings (based on user overrides and corrections) and over time has a high success rate on import. Once the columns are defined, editing the column roles (purchaser vs. bidder, visibility, mandatory vs optional, etc. is very easy) – you can simply toggle.

In addition, and this is a major improvement over the early days (when there was no quality control on the coal being used to power that little engine), all of the inputs can be associated with one or more validation rules that can require an input be completed, from a valid set, the same as related bid values, and so on. Out of the box rules exist for easily defining uniform values across a column for a lot (if all items must come from or go to the same [intermediate] location, for example) and requiring complete coverage on a group of lots (critical if a supplier must bid all or nothing on an item, set of related items, sub-assembly of a BoM, etc.). If those don’t work, you can use advanced conditional logic on any (set of) column(s) to ensure specific conditional rules are met, especially if a value or answer is dependent on another column or value. The conditional rule generator uses the formula builder that supports all standard numeric operators and numeric columns as well as string-based matching and type/value based operators for ensuring entries come from an appropriate set of values, possibly dependent on the non-numeric value defined in another column.

In other words, because all cost elements can be defined, because arbitrary formulas can be used to define costs, and because rules can be created to ensure all cost elements are valid, the platform truly supports total cost modelling (which is one of the four pillars of Strategic Sourcing Decision Optimization [SSDO]).

For easy reference, the other three pillars are:

  • solid mathematical foundations, which we know Keelvar has from previous coverage;
  • what-if capability, which has been there since the beginning as Keelvar has always supported multiple scenarios;
  • sophisticated constraint definition and analysis — which was lacking in the past and which we will cover next.

Moving onto constraint definition, Keelvar has made considerable improvements both in the definition of bidder and lot groups and the ability to define arbitrary limit constraints on arbitrary collections of bidders and lots/items. This allows it to address the four categories required for SSDO:

  • allocation: to define minimum, fixed, or maximum allocations for a supplier
  • capacity: to take into account supplier, lane, warehouse, or other capacity limits
  • risk mitigation/group-wise allocation: ensuring that the award is split across a group of suppliers to mitigate risk, that a supplier receives a minimum amount of a group of items to satisfy an existing contract, etc.
  • qualitative: to make sure a minimum, average, quality level, diversity goal (volume-wise) or other non-cost constraint is adhered to

Keelvar has always been great at capacity and allocation but, in the past, it’s ability to define risk mitigation/group-wise allocation was limited and qualitative almost non-existent. But with proper definition of bidder and (item) lot groups, and the ability to define constraints on any numeric dimension (not just cost), one can now define the majority of foreseeable instances of both of these constraints. You can create bidder groups by geography, and ensure each geography gets a minimum or maximum allocation. (And even though you couldn’t define a 20/30/50 split directly, you know the cheapest supplier will get 50%, the most expensive 20%, and the middle one 30% by basic logic. If you wanted a 10/25/35/40, that would be a bit more difficult. But logic dictates the two cheapest get 40%, ensuring the two most expensive get 10%, if you insist each group get between 10% and 40%. A simple total-cost analysis tells you which group should be 40%, which group 35%, which group 25%, and which group 10%. And almost every other group-based allocation you would reasonably want to define would be straight-forward or close with post-scenario analysis.)

Quality constraints such as diversity (by volume), quality (by unit), or sustainably approved (by unit) are also very straight-forward to define. For diversity, simply group all the diverse suppliers and ensure they get a minimum percentage of the volume (by unit cost if that’s your metric) to meet your goals. For quality, if every supplier has an internal quality rating, for each quality level, you can define a maximum allocation that can be allowed for that group to ensure a minimum overall quality level. (And if there was hard data by unit by supplier, you’d just define a hidden column in the bid sheet and define a limit constraint on the quality instead of the cost.) For sustainably approved (by unit), you’d simply group all the sustainable suppliers (instead of the diverse ones) and ensure they received a minimum percentage.

In addition, since we last covered Keelvar, they have incorporated soft-constraint support and made the definition thereof super easy. In the application, you can define a constraint as available to be relaxed if the total cost savings exceeds a certain value. That’s as easy (peasy) as it gets.

This takes us to workflow-based event automation. In the updated Keelvar platform, you can define a complete event workflow, and the platform will automate almost the entire event for you, handling everything until it’s time to allocate the award. Once you create an instance, which is as easy as selecting an event template for activate and defining just a few pieces of meta-data, it will auto-fill / update all of the remaining meta-data (since last time if it was previously run), extract the current, approved, supplier list, automatically request approval from the category owner, publish the RFP (or launch the auction) on the predefined date, automatically send the invites out, collect (and validate) the bids (using the predefined validation rules), run the predefined scenarios when the bidding closes, kick-off the predefined analyses and reports on those scenarios and package them up for the event owner (which can include exports), and take the buyer right to the award screen for scenario and/or manual allocation where the user can make the award if ready, review an analysis, or jump back to a scenario, alter it slightly, re-run it, and then use that modified scenario for the award definition.

In terms of process definition, Keelvar has an integrated visual workflow editor where the user can compose the mandatory steps, conditional steps, and necessary approvals at each step (which could be the category owner, a manager if the estimated event value exceeds a threshold, etc.). Each step can link to an appropriate element which can be completely customized as needed.

However, the easiest way to define an event template, and the most effective way, is to instantiate one off of a completed RFP. The built in logic and machine learning can automatically generate a complete workflow-driven template off an RFP. It can define rules for filling in all definition fields off of a few key pieces of meta-data, define rules for identifying the (recommended) suppliers for future events (for one-click approval by the category owner), suggest publication dates and bidding timeframes, define all of the bid validation rules based on the bid-sheets and defined rules, create default scenario definitions, (re)create default bid/scenario analysis and visualization reports as well as rules to auto-package and distribute exports to the event owner, and even identify the recommended scenario for award allocation.

Once the event template is automatically extracted from the completed event, a user can review it in its entirety and edit whatever they want. And then they know when they next instantiate it, it will run flawlessly. (It’s automation. Not automated. And that’s the way it should be.)

Finally, when it comes to usability, if it’s not immediately obvious, usability has been enhanced throughout the platform. But it’s easier to see it than describe it. So if you want a modern optimization-backed sourcing optimization platform, just get a demo and see it for yourself.

In closing, Keelvar is not just the last standing specialist optimization provider, they’re now one of the best. Let’s hope the next major enhancement tackles true Multi-Objective Strategic Sourcing Decision Optimization On Procurement Tends. (MOSS DO OPT!)

9% of Companies Claim To Be Ready to Managed Risks Posed by AI? Bull Crap.

the doctor could not believe the recent headline in Forbes that said Only 9% of surveyed companies are ready to manage risks posed by AI. Because there is no way that 9% of companies are ready to manage the risks posed by AI. There’s no way even 0.9% of companies are ready to manage the risks posed by AI.

Why? Because of the rampant introduction of massive LLMs and DNNs that no one understands, for which I’m sure we’ve yet to seen the last of the abysmal failures, hallucinations, and suicide coaxing. There’s simply no way we can even begin to predict all of the potential errors they are going to make, the risks they are putting us under, the repercussions if those errors are made and risks materialize, and how the risks can be minimized, if not mitigated. No way whatsoever.

Not only is it theoretically impossible to be fully prepared, but when you consider that the average organization is not even equipped to handle regular software failures, how can the average organization expect to handle a software-based AI failure it can’t even predict?

The article, which quoted a recent study by RisKonnect (who are obviously able to detect and protect against most types of risk by using RisKonnect, and maybe that’s why they are so confident they can protect and defend against AI risks, but RisKonnect is for traditional enterprise and third-party risk, not cyber risk, and definitely not AI risk — no one can protect against a risk when they don’t even know what the risk is), did quote some very useful statistics on areas of concern. Specifically, of the companies surveyed

  • 65% are concerned about data and cyber,
  • 60% are worried about employees making decisions on erroneous information,
  • 55% are worried about employee misuse and ethical risk,
  • 34% are worried about copyright and intellectual property, and
  • 17% are worried about discrimination risk.

The risks are the right risks, and the order of priority is about the right order, but the percentage of companies concerned is much too low.

1. 100% of companies should be concerned about data and cyber. Not only are we in the age of state-sponsored hacking, which makes any company with useful confidential designs and information a target, but with almost all significant commerce being conducted online, all companies are a target for financial fraud.

2. 100% of companies that need to make decisions based on data analysis should be concerned about erroneous information, as all companies have bad data, and the bigger the company, the worse the data.

But none of these match the risks of AI. As per the quote in the article from Caitlin Begg, an over-reliance on AI can risk robotic, insensitive, spammy, or off-topic messaging, and that’s just the beginning. As noted, most companies haven’t simulated their worst case scenario, and since one can’t even predict what that is with AI, they aren’t even close to ready. It’s not just another article in the organization’s tech stack, even though the article seemed to indicate it is. One can prioritize transparency, accountability, threat and vulnerability monitoring, and risk mitigation, but when most AI applications can’t explain their actions, aren’t accountable humans, have no realistic threat and risk assessments, and there is no way to mitigate risk except not to use the technology in the first place for any decision that should be made by a HUMAN, it’s just not enough.

The precautionary steps are not to identify where AI can be most effective and incorporate it, the steps should be to

  1. identify where partners and third parties are using AI and putting your organization at risk
  2. identify where employees might be using unapproved web-based AI applications and put a stop to it
  3. identify where your SaaS providers are not only using, but introducing, AI into their applications after purchase and delivery and ensure that any utilization is bounded, tested, and properly constrained to prevent risk

Then, instead of unbounded AI, identify appropriate automation technologies that can be properly configured, integrated, and managed as part of an enterprise stack. And reap the rewards while your competitors deal with risks.

Visibility into Vizibl, The Collaboration Platform for True Supplier Innovation

It’s been a decade in the making, especially since it took years for Vizibl (founded in 2013) to find it’s focus, but what was once yet another SRM (Supplier Relationship Management) platform is now a truly leading Supplier Collaboration, Innovation, and Transformation platform.

Starting out with the vision of a better SRM, it took a while for Vizibl to find its niche and double down on it. In fact, it took years of working with clients with highly specific (customization/process) needs for them to realize that they were good at developing for and supporting specific, sometimes, complex processes and years more for them to sit back and identify the commonality, design standard project and service layers, and bring them to market. But they did, and they have, and we will discuss the first major project/service layer they are bringing to market later in this article.

The Vizibl platform has seven main components:

  • Supplier Information Management Foundation
  • Supplier Collaboration Workspace
  • Supplier Innovation Hub
  • Supplier Relationship Management Module
  • Dashboards, Analytics, and Reporting
  • Program Layer: (Foundation for) Specific Development/Improvement Programs that Cross-Cut the Entire Platform
    (built on a virtual platform integration layer)
  • Supplier Sustainability Management

1. The Supplier Information Management Foundation is what you would expect from a leading SRM platform — it can track all of the core data and meta data you would expect on a supplier and can be extended as needed to track all of the data you require across all areas of supplier information, products, risks, compliance requirements, performance requirements, contracts, projects, initiatives, and activities you wish to manage.

Supplier Onboarding is straight forward as it’s quick and simple to create a new company record to begin the process, with only minimal data needed. New suppliers can be onboarded as standalone, children of an existing company, or related entities. The platform can maintain complex supplier tree relationships and the tree can be visualized along with a roll up of relevant metrics, project counts, and appropriate relationship data.

2. The Supplier Collaboration workspace is where the buyer can communicate with the supplier, spin off action plans and initiatives, store ideas and plans, pull in and push out data as needed, and put thought into action.

3. The Supplier Innovation Hub is where the core of the magic happens. This is where challenges can be issued, goals set, and projects planned. It’s where projects are defined to increase supplier performance, improve product designs or manufacturing, increase sustainability, or decrease CO2/GHG emissions.

Projects have activities (or tasks), roadmaps that link them together, objectives (outcomes), value tracking metrics, integrated communications, and teams.

4. The Supplier Relationship Management Module is the glue that holds it all together. In addition to integrating all of the pieces, it also supports the creation of basic supplier action/account plans, the definition of strategic objectives, and integrated overview dashboards. It also allows for the definition of supplier teams (that it calls circles) that represent the different teams the organization will be working with, the management teams, and boards of relevance.

5. The Dashboards, Analytics, and Reporting capability is used to summarize and display the various types of data, metrics, and indicators tracked by the platform. These dashboards cannot only roll up metrics across the platform, but can also roll up metrics in, and across, projects by stages, as well as break them down by regions or supplier trees.

6. The Supplier Sustainability Management module is one of their latest modules focussed on tracking and managing an organization’s sustainability initiatives. It can track all of the emissions for each supplier, those that are reporting, the associated spend, and any other GHG data of relevance to the organization. It can also track all of the data associated with ESG surveys requested by the organization, which can be custom created and as broad or deep as required.

7A. The Program Layer is the toolkit that they use to build custom cross-platform program management capability that allows an organization to tackle new, and possibly exciting, initiatives that can transform their operations, product, and / or supply chains. Programs consist of suppliers, goals and targets, indicator metrics, associated data and reporting, summary dashboards, and scores.

7B: Decarbonization as a service is the first offering from Vizibl built on the program layer that integrates all of the platform capabilities to track scope 3 carbon across the supply chain by extending the sustainability management module to focus on the import and calculation of carbon emissions by supplier over time as well as best practices and learnings that can be shared with a supplier to help them reduce their emissions through leaner production, cleaner energy sources, new production processes, etc.

When it comes to the administration of the Vizibl platform, an administrator can configure, more-or-less, everything. First of all, they can configure the organizational tree as needed to match their organizational structure and include subsidiaries and use a variable number of levels for each organizational branch. So, the organization can have the global holding company; American, European and Asian holding company subsidiaries; individual (holding) companies for each country it operates in; and, if necessary, breakdown into individual locations or divisions if needed for management purposes. You can have five levels in Asia, four levels in Europe, and three levels in the Americas if that’s what’s necessary to exactly match the organizational structure. And of course, each company node in the organizational tree can have its unique settings, inheriting from the node above anything that does not need to be changed.

Similarly, because a company is a company in the system, full supplier organizational structures can also be modelled according to their company structure and modelled down to the individual (factory) location. This is particularly important since a diversity initiative may be global but improvement efforts might be restricted to one factory producing one particularly unique component for one product line.

Then, the organization can configure, for that company:

Account Plans
for each supplier, the company can define the strategic objectives, guiding principles, and target behaviours; these can be defined from scratch or added from a common library
Data Imports
to define regular / repeating file-based imports
Initiatives & Opportunities
the overarching initiatives and/or opportunities being sought, the plans and project stages, questionnaires, suppliers, etc.; the form builder is section based, supports all standard HTML objects, and all of the (numeric) data collected can be subjected to metrics and rules (to map to binary/integer) which can be defined on multiple choices
allows a user to define the performance metrics / KPIs, organized into categories, that are to be tracked, define what levels they are tracked at / rolled up to, and even customize the metric calculation in individual nodes
define the user permissions (by role)
centralizes the organizational projects
define the supplier relationships by mapping the supplier to the specific nodes in the organizational structure where the relationship exists as well as the segment (division/category) they are servicing
define and customize the reports
define the project states for initiatives and opportunities, rejections, suppliers, etc. as needed to match the organizational process; can start with defaults
encapsulates all of the surveys that can be reused across initiatives and opportunities
custom tags for tagging initiatives, opportunities, suppliers, etc. for quick search & filter
User Management
define the organizational users
Value Trackers
defines, and centralizes, the metrics that will be used in the innovations, opportunities, and performance tracking

In summary, the administration is very powerful … in fact, it’s one of the few solutions where the organizational structure for all companies (buying and supplying organizations) is extensively customizable, where initiatives can be tailored to the subset of relevant relationships and locations, where the inheritance for an initiative can be customized, and where you fully customize and localize all supplier interactions to just the organizations and teams that you need.

This is the first aspect of Vizibl that truly makes it stand out. The degree of customization of initiatives only to the relationships of relevance, teams of relevance, with metrics of relevance is far beyond what most of the traditional “Relationship” solutions actually offer.

The second aspect of Vizibl that makes it stand out is the new program layer they’ve built to support the creation of programs that tie together all of the relevant SXM capabilities needed to completely manage an organizational initiative across the supply base. In many platforms, the organization needs to manage the surveys, performance metrics, reports, projects, collaborations separately across the different modules of the platform that were built up over time.

The third aspect of Vizibl that makes it stand out is the new Decarbonation-as-a-Service offering built on this program layer that integrates all of the platform capabilities to track carbon down to scope 3 across the supply chain, provide insight into best practices and learnings to reduce emissions, allow for the creation of projects and initiatives to tackle the opportunities, track improvement over time, and essentially turn measurement into action into improvement. Carbon calculators are a dime-a-dozen from everyone and their dog, and can be built in 15 minutes in any good modern (spend) analytics platform, but few platforms do real monitoring, few platforms allow for the creation of supplier development projects, and fewer still provide real insight into what can be done to get results.

In other words, if you really care about the “R” in Supplier Relationship Management, and truly want to manage that relationship for true supplier development and improvement, you should definitely make sure Vizibl is on your short-list.

Promena’s Upgraded Platform Packs a Rich Caffeinated Turkish Punch

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.