Category Archives: Technology

Vendor of the Week

Vendor of the Week is a SI exclusive that runs through the end of the year, or until the first two sponsors sign up, whichever comes first.

The following vendors have been selected as vendor of the week:

Week Vendor
October 22, 2007 Coupa
October 29, 2007 Provade
November 05, 2007 Co-exprise
November 12, 2007 Vinimaya
November 19, 2007 Aravo
November 26, 2007 Next Level Purchasing
(now the Certitrek NLPA)
December 3, 2007 Global Data Mining
[acquired by CUSTOMS Info,
acquired by Descartes)
December 10, 2007 BIQ (acquired by Opera Solutions,
rebranded ElectrifAI)

Vendors of the Week are selected randomly at the sole discretion of the doctor. The vendor of the week is a company that is doing something the doctor considers to be truly innovative and relevant to sourcing and procurement.

Coupa + Amazon EC2 = Energized Procurement!

One of the great things about the blogsphere is we don’t have to wait for them to stop the presses to get a great story in at the last minute. We just type, save, publish – and presto! – you get the latest news as soon as we get it, as it happens, and, when you’re really lucky, before!

Tomorrow, the latest press release from Coupa will blanket the wire, traditional e-Procurement companies will cringe, and new age technophiles will rejoice. For tomorrow, the world’s simplest e-Procurement system will be available on-demand to enterprises of all shapes and sizes at a fraction of the cost of traditional e-Procurement systems. Just like SalesForce.com revolutionized the CRM world, Coupa is revolutionizing the e-Procurement world – and then some! By basing their new services on Amazon’s EC2 Virtual Grid Computing Cluster, they are ensuring that they’ll always have the computing power required to ensure rapid response times, regardless of how many users decide to use the system at exactly 4:55 p.m. to get that last order of the day out before they leave.

Normally it takes a big merger, acquisition, or introduction of a brand-spanking-new technology to shake-up a market – but Coupa has achieved puree with nothing but open source and a revolutionary pricing model. They don’t know it yet, but I’d say at least three quarters of the e-Procurement companies I track over on the resource site are in dire straits once procurement professionals realize everywhere that it doesn’t cost in the high six, or even seven, figures for basic enterprise e-Procurement anymore – and that it doesn’t require a six month roll-out plan either! Specifically, I predict that any company trying to make a living just selling decade old order management, e-RFX, e-Invoicing, and catalog management technology is headed for extinction. Unless they are also providing advanced payment solutions, supply chain finance, inventory visibility, or other advanced service offerings – they’re going to have a very tough time competing with a true multi-tenant on-demand e-Procurement platform with unlimited scalability and exponentially decreasing costs on a per-user basis as your organization grows.

This brings us to their transparent four layer pricing model – the first of its kind – that is designed to make the Coupa e-Procurement system affordable to even the smallest 3-guys-in-a-garage start-up while simultaneously making it best-value for your large enterprise who’s still struggling to embrace the 21st century and just needs a basic e-Procurement system. How affordable? How valuable? Although the exact prices won’t be available until tomorrow, I have it on good authority that a 10-user organization can get started for as little as 3K a year (and maybe a little less)! And – you better be sitting down for this one – a 1000 user organization can get started for under 50K per year! That’s less than $50 / user / year! And the enterprise package also includes their new “Quick Start” program which gives you a dedicated solution delivery expert, guidance on collection of key company information, and assistance in configuring your Coupa-On-Demand instance – including chart of accounts, users, suppliers, contracts, catalogs, approvals, and integration advice.

Coupa has also been working hard since their last release to extend their functionality, and now supports a number of common office supplies and electronics vendors using punch-out and cXML order delivery (including Office Depot, Office Max, Dell, and VWR), direct quickbooks order import via Traxian for small businesses, and an integration web services layer that automates the movement of data in and out of Coupa-On-Demand using XML and an open API that supports seamless integration with accounting systems and ERPs.

And I’m sure there’ll be goodies aplenty on their newly designed web-sites that will be live tomorrow. That’s right – Sites! In addition to Coupa.com, there’ll also be a new Coupa.org site as well that will provide a dedicated home for Coupa Express, the world leading open source project for e-Procurement that has already surpassed 9,000 downloads and will probably pass the 10,000 mark before the month is up!

So watch the wire – and check out Coupa*! The e-Procurement revolution is at hand!

And, for those of you still wondering, this post fits in perfectly with the Sustainable Sunday theme : On-Demand e-Procurement that uses Amazon EC2 Virtual Computing Grid to only consume as much resources (and energy) as is required to support your needs and keep your costs low helps you sustain your procurement initiatives!

*Wouldn’t Coupa make a great sponsor of Sourcing Innovation? They’ve been pretty innovative lately.  Feel free to leave any comments – including dissenting ones! – below. I know they read this blog from time to time.

There’s More to Ketera than Connect

The big news this month with Ketera was their recent Connect conference in California, but back in July they put out a good whitepaper on “Supplier Catalog Management: Avoiding an Expensive SAP SRM Migration” in the context of supplier enablement.

The white-paper starts by noting that SAP SRM customers are in a big dilemma with regards to their current Requisite implementation (which is no longer supported) – either they migrate to CCM, which will in turn require another migration when the customer upgrades to SRM 6.X down the line, or they migrate to MDM Catalog, which is young, buggy, unproven in large deployments, and has a non-trivial cost of migration. However – there is a third option – and that is to migrate to a third party solution. Of course, the solution proposed is Ketera’s Supplier Content Management (KSCM) solution, but the central idea is valuable – why rely on an inefficient and costly solution with a poor migration path when you can instead use an efficient, cost-effective, and extendible third party solution that can meet your needs.

The white-paper also outlines what such a solution should look like. It should be on-demand, streamline the content/catalog development and update process, allow suppliers to easily upload, validate, and manage catalogs and related content using tools they are familiar with (such as MS Excel templates), enable multi-party workflows that bring together suppliers, buyers, and external service providers, and make all catalogs immediately available for use by SAP SRM once they are created.

Furthermore, the solution should support at least two deployment modes: Supplier Managed, Vendor Hosted and Supplier Managed, Client Hosted. In both cases, the supplier provides all the product data and is responsible for keeping it up to date, but in the first case the vendor manages the implementation and IT support and integrates into SAP SRM via punch out while in the second case, the buyer manages the implementation and the buyer’s IT team handles the bulk of support. And, if the supplier or buyer wishes it so, the Vendor should be capable of managing the catalog on behalf of the Supplier.

Now, I know this isn’t as glamorous as the financial supply chain solutions discussed by Jason Busch over on Spend Matters (Ketera Connect Dispatch 2), as innovative as the cost-baslining and modeling solutions I suggested back in a July post, or as appealing to a CFO – but it’s important nonetheless, since the more efficient a procurement professional is, the more time they have to seek out, find, and capture true savings.

When it comes to data migration, there’s no need to be a sap.

What’s the Key to Effective Purchasing?

CAPS Research latest Practix, “The Key to an Effective Purchasing System: Is It Technology or Supplier Relationship Management?”, by Keah Choon Tan asks whether sophisticated and often expensive information technology is the only solution to improve competitiveness in response to the tremendous pressures of globalization and increasingly demanding customers. The study describes the lean but highly efficient supply management system of a world-class casino-hotel chain that emphasizes strategic supplier relationships over implementation of sophisticated information technology and that has developed a supply management system founded on a contemporary management philosophy that stresses long-term, mutually beneficial relationships, trust, and sole sourcing.

The goal of the article was to demonstrate that an effective supply management policy can be the key to managing the supply function effectively. The policy emphasizes the formation of strategic alliances to achieve the lowest total acquisition cost, rather than forcing suppliers to bid on each purchase – since this approach tend to focus on short term measures such as unit price. Once the strategic alliances are formed, the best suppliers are selected for each item based on quality, reliability, delivery, and total acquisition costs and blanket orders are issued. Furthermore, to update and continuously improve centralized blanket orders, the company has processes in place to enable suppliers to solicit new business and chefs to request and receive samples and pricing information.

In addition to sole sourcing, the company also employs supplier performance monitoring, continuous evaluation, and competitive bidding when a new product, or source, is needed. The company also has well-defined, rigid, supplier selection criteria which include competitive pricing, quality standards, reliable services, processes, and delivery, the ability to provide niche product and design concepts, financial stability, provision of warranties, insurance and bonding, proven performance standards, and excellent service and support.

The study then deduces that implementing an appropriate process is the key to solving business challenges, and information technology is merely a tool to facilitate the process. Furthermore, the study notes that the process has led to time savings, cost savings, accuracy, waste elimination, and improved control without the support of much in the way of information technology.

Although I’d have to agree that the process is key, I don’t think the study stresses enough that it was based on the restaurant services arm of a casino hotel chain that has only eight locations, all of which require essentially the same items. This is not very sophisticated supply management. For an operation of this size, good processes backed by Excel and Access are pretty much guaranteed to get results (but not necessarily great results, especially from an efficiency standpoint).

Thus, although it’s a good report – it’s also a dangerous one. There’s no way this would work for a major fast food chain if it did not have good sourcing and procurement systems to back such a strategy up. Although tools alone do not a successful sourcing process make, without tools, the supply management team of any chain of even just a few dozen locations would quickly become swamped under information overload and be unable to keep track of who is supposed to ship what where, whether or not performance is acceptable, whether or not quality is acceptable, and whether or not they are truly getting the best price. Although a sole source strategy backed up only by good supplier management is often a great approach for a small business, without good technology to back it up, it just doesn’t scale!

A fool and his money are soon parted … don’t be a fool!

The 3rd Wave

No, this post isn’t about molecular diagnostics, feminist activists, or Toffler’s vision, but instead about Blinco System’s (now called 3rdwave) Global Commerce Management (GCM) solution or, more precisely, their approach to Global Commerce Management.

Billed as a solution that seamlessly fills the gaps left by SAP, Oracle and other enterprise IT solutions, and allows companies to manage all their global processes surrounding their products or services from “procure-to-pay” or “cash-to-cash”, what it really is, or wants to be, is an ERP-for-Distribution solution.

Noting that traditional ERP systems like SAP and Oracle are not appropriate for non-asset-based distributors, in addition to being prohibitively expensive for small and medium sized companies, and that many companies also have to buy additional sourcing and procurement and supplier relationship management (SRM) and customer relationship management (CRM) solutions, which are also expensive for small and medium sized companies, Blinco decided to try and rectify the problem with a single approach that tackled the unique problems associated with non-asset based distributors.

The solution is built around a Global Data Repository that tracks all data associated with a product or service from the time of the first requisition through product delivery to final payment and accounting. It can track sourcing related RFX information and bids, procurement related purchase orders and invoices, and accounting information and payments. Whereas an ERP system is traditionally inward-centric, focussing on the data you need to run your manufacturing operations, what a global company needs, especially one that is focussed on distribution, is an outward-centric solution that is able to track all of the information associated with import and export – purchase orders, insurance information, financing, trade documents, shipment information, goods receipt, invoices, etc. (For more information on global trade, and the import and export cycle, see the Global Trade Primer over on the eSourcing Wiki [WayBackMachine]).

I’ve only begun to investigate Blinco System’s GCM solution, but the approach is intriguing – especially for a smaller, mid-size, company that needs the latest in ERP, sourcing, procurement, and supply chain technology, needs it all integrated, but at a budget. Most smaller mid-size companies have a much greater need for solutions that cover the various supply chain areas – sourcing, procurement, SRM, CRM, etc. – than they do for best of breed solutions, as most of their spends are not large enough to warrant the extra investment. Even though best of breed solutions typically save more than average solutions, the few extra percentage points may not make enough of a difference relative to the cost of such solutions for most categories procured by your average mid-size company. Thus, a specially integrated solution might be the way to go.

I’m not going to go so far as to recommend their solution at this point, as I have to learn more about it, and you won’t be able to maximize it’s potential until they correct for a few deficiencies (which they’re working on, but it will probably be nine months to a year before the next version that addresses them is released), but it’s certainly worth looking into if you are in the market for an ERP and a sourcing or procurement solution, as it may be able to fill both of those needs. Furthermore, since the due diligence required in the selection of an ERP system is not something that can be performed over night, by the time you made a selection, completed your implementation plan, and got started, they might be pretty close to what I’d like to see for the type of solution they are expanding. (Which, by the way, is proven with more than one multi-billion dollar company.)