Category Archives: Vendor Review

LogicSource OneMarket – An Interesting Solution for Sourcing Projects

LogicSource OneMarket, which grew out of a unique automated procure-to-play platform to enable buyers and suppliers to more effectively address the complexities of print management, is a unique platform for sourcing “projects”. Marketing and advertising projects, capital equipment and leasehold acquisition projects, temporary labour projects to meet the holiday rush, etc. The developers — having recognized how the pre-cursor complex category platform they developed to specifically handle complex categories such as direct mail promotions, marketing collateral, promotional items, and packaging was being used across a wide range of industries — also recognized that what made these categories complex was the project-based nature of the categories, and focussed on extending that.

A few years later and they have a distinct platform that, while not specific to marketing, capital acquisitions, or labour projects, is well suited for those types of one-off sourcing events. While the platform has four components — the main e-Procurement (Sourcing) Engine, the Analytics Platform (designed for Finance), Digital Asset Management (designed for Marketing), and Visual Merchandising Management (designed for Operations) — we’re only going to discuss the e-Procurement / Sourcing component in this post.

The module is built around “campaign” management, and that’s why it is effective in special projects that are essentially campaigns to get something specific, and special, accomplished like managing a print advertising campaign for a new product, acquiring a new office building that meets everyone’s needs*, or quickly hiring 100 new workers to staff the warehouse to get all the packages out on time for the holiday rush.

Campaigns are much more challenging than regular commodity/product/service sourcing projects where you can just send out a bid for a group of SKUs, ask carriers to quote on lanes, and request standard rate cards for well defined service roles, as you need to develop customize requirements and RFIs, allow for and handle highly variable RFPs depending on the solution proposed by each vendor, compare bids at different levels of granularity, support complex review and sign-off chains, and capture the data required for detailed Statement-of-Work addendums to the contracts that can be used to generate the appropriate POs for whatever billing framework and schedule is agreed to.

To support this type of special project, each campaign starts with a specification where the buyer defines what they are looking for to the best of their ability, defines the workflow, selects the initial suppliers, includes any known products they need (quoted) from the built-in catalog capability, and/or defines any services they need (quoted) and attaches the rate cards they need filled out. The buyer can also choose to automatically populate the RFPs sent to suppliers with known or historical prices for known product or service needs, which then requires the supplier to only provide updates where necessary and fill in prices for products or services not known to the buyer.

Special projects can have multiple RFX rounds and the product logs all steps and changes for historical audit purposes. When the project is complete, an award can be created and, if necessary, split across multiple suppliers at different levels of project granularity. For example, if it was an advertising campaign project, one supplier might get a region (southern), another might get a state (California), and another might simply get a city (such as New York) because of distinct consumer preferences in a large target marketplace.

Once the award is made, the tool can be used to track project progress and handle the traditional billing and payment cycles (which you would expect as it evolved from an e-Procurement platform). In addition, it can track all change orders and everything related to project management is integrated, logged, and audited. In addition, suppliers can generate invoices within the supplier portal against work orders at agreed upon payment schedules for milestone driven projects, which makes it a lot easier for payment review and approval then when a supplier sends AP an invoice for “Services Delivered Against Campaign X” and the accounts payable clerk has no clue if the milestone has been hit or not.

LogicSource OneMarket is a fairly unique solution that is worth checking out if your organization does a lot of campaign-based projects across disciplines and your standard sourcing suite doesn’t suit the purpose. Keep it in mind the next time you hit a brick wall with respect to campaign management in your previous-generation sourcing suite.

*but not everyone’s wants — because, as poor Dilbert found out in the “Tower of Babel”, Episode 7 of Season 1 of the animated TV Show, if you try to satisfy everyone, you satisfy no one.

marketdojo – A Dojo Where You Can Plan your Own Path

In our last post, we introduced you to marketdojo, a state-of-the-art do-it-yourself e-Negotiation suite that supports complex RFX and e-Auction events as well as integration with their categorydojo product that helps a user determine appropriate sourcing strategies for each category and prioritize those categories based on the expected size of the opportunity.

In yesterday’s post, we described their basic marketdojo product which consists of an RFX and e-Auction offering (which supports multiple RFX types and Auctions). Today we are going to discuss their categorydojo product, which is one of the two real differentiators between them and the other players targeting the low-end of the e-Sourcing market (in an effort to bring smaller companies out of the Purchasing Dark Ages where some still remain).

A lot of consulting firms have been doing the category analysis that categorydojo has been doing for years, and a few companies have even built simple opportunity analysis tools to help you figure out how what opportunities you should be chasing, but the doctor has yet to see any tool that is as clean, streamlined, and useable by an average buyer without a lot of training or consultation. This is one of the two real differentiators that marketdojo has built and one of the two features that actually impressed the doctor, which is not easy to do if you are yet another e-Sourcing or e-Procurement provider considering the dozens upon dozens of tools he’s seen over the last fifteen years. Basic suites are commodities now, and the most basic suites are free.

Once you’ve activated marketdojo, giving categorydojo a spin is as simple as going to categorydojo, clicking on the Dashboard link at the top of the page, and activating it.

Once it’s going, you create a spend portfolio (by selecting the Create Portfolio option) where you define your top categories, and then go through a wizard-driven Q&A about each category to help the expert system underneath properly classify and rate your category. Category creation can be as simple as category name, currency, average annual spend, and a notation on whether or not the spend is subject to EU Procurement Directives (if you are in the public sector). Then you define subcategories, their component spend, expected spend trends, and contract term. Then you define your perception of market conditions and bid complexity and you’re off to the races. Once you’re done, the tool presents you with a recommended sourcing strategy, which in the marketdojo suite, is initial RFI (because it’s not ready for a market event or a market event is not expected to be successful at this time), RFP (because it’s not auction appropriate), RFQ and standard e-Auction, or RFQ and Reverse Japanese Auction — and charts it on a quadrant graph relative to your other categories.

Then, once you have defined a set of categories, you can deep dive in and see the relative spend vs complexity for each category, the time vs. return, and most importantly, the power balance for each category and what it means to your organization and the expected savings. The founders, with a long history in sourcing, built up a knowledge base on different categories and expected savings targets and built this in to the evaluation from day one. Then, upon product launch, they made sure that categorydojo was integrated with marketdojo so a buyer could push an award back after an event was run so the award, and the savings, could be evaluated against the expected savings. This result was used to tune the models over time to the point that a buyer can have confidence that, at least 9 times out of 10, the available savings is within the range predicted by the tool (if the market conditions have been accurately captured and the suggested strategic approach is taken). I’ve seen the reports (which, by the way, do require a paid license), and, for every category I’m familiar with, the range is a realistic savings range for a company that hasn’t properly sourced that category before.

Finally, once you have all of the spend categories defined, and have worked your way through the reports, the tool lets you prioritize the categories so that you can build an effective sourcing plan for the year.

The tool is well done and easy enough for any buyer to use without a £5K a day senior consultant from a Big 6 consultancy! (Which means that the tool, which only costs £1000 per user per year, pays for itself as soon as you use it because each category analysis from a Big 6 will cost you at least £5000, and that buys an unlimited one user license of marketdojo for a month, which will help you realize your organization’s savings potential!)

If you’re at the lower end of the mid-market and in need of a (better) e-Sourcing tool, I would strongly suggest that you check the marketdojo out. Even though they have a few clients in the higher end of the mid-market, they are really designed for the low-end, and they fit very nicely there.

marketdojo – A Dojo Where You Can Walk Your Own Way

marketdojo is a company that many of you haven’t heard of and a company that I’m sure many of you who have heard of them dismissed because of the Western notion of what a dojo is. In western thought, a dojo is believed to be a training school for Japanese martial arts where students to to learn from a sensei. So when you hear marketdojo, the first thing you probably think of is a training school for (e-)commerce best practices and a services company — not a do-it-your-self SaaS e-Sourcing platform.

But that is what marketdojo is — a state-of-the-art do-it-yourself e-Negotiation suite that supports complex RFX and e-Auction events as well as integration with their categorydojo product that helps a user determine appropriate sourcing strategies for each category and prioritize those categories based on the expected size of the opportunity.

And they are appropriately named. One has to remember that dojo literally translates into “place of the way” and really means “a place for students to gather for practice, training, and testing”. Furthermore, there are also hombu dojos, which are the stylistic headquarters of a particular art. marketdojo is the hombu dojo for the do-it-yourself e-Sourcing art where the practitioners of the marketdojo way gather.

And while they were yet another me-too e-Sourcing tool when they started four years ago in 2010, they have taken great strides to differentiate themselves from the other entry-level e-Sourcing suites that revolve around e-RFX and e-Auction. These differentiators include:

  • Try-Before-You-Buy with no sales team interaction*while there have been a few e-Sourcing providers that would set you up a demo environment and let you take it for a test drive, SI doesn’t know of any that put their full platform up on a demo box where anyone could log in and test out all of the features without first engaging with the sales organization, sitting through the pitch, and proving their interest; To give marketdojo a test-drive, you go to the Sign Up page, fill in a short form, click on the link in the activation e-mail, and then click on Try Our Sandpit at the top of the home screen. No credit card required. It takes about 60 seconds. (You do, of course, have to pay before you can run a live event, but not before you’ve verified that it will work for you.)
  • Toggle View
    In the marketdojo platform, it’s a one-button click to toggle between your buyer view and the view of any supplier. No logging out and logging in as a separate user or trying to watch two views in two different browsers at the same time on a split screen.
  • Easy Public and Private Sector Event Creation
    In many economies, and the EU in particular, there are a lot of rules around public sector tenders, and the platform, with a single checkbox, can insure that all of the proper information is provided, questions are asked, and procedures are followed or, if the company is a private sector company, the buyer can go through a streamlined process and only provide the information she needs to provide and only request the information she needs to conduct the event.
  • Easy Pay as You Go
    You can pay per drink or buy an unlimited subscription on a monthly or yearly basis. To pay as you go, which starts at £500 for a single event, you purchase credits as needed on your credit card and go. There’s no limit to event size or event duration — and if you want to run an event on a category that’s under £50,000 of annual spend, they’ll even give you a discount!
  • Complex Lotting and BasketsNext month marketdojo will be releasing their new version which allows you to create complex lots and market baskets where each item can have a user-defined number of cost components and a formula that defines the total, or weighted, cost for the item and have the supplier provide their starting bids at whatever level of detail you desire. Then, when the auction is run, you can choose whether suppliers modify their bids at the cost component level, item level, market basket, or entire lot level — and do so as a fixed quote or discount off of their previous bid. This helps a buyer get a good understanding of what the cost drivers are but yet run easy events.

In addition, like other providers, they also offer:

  • Excel Import and ExportThis is especially useful with complex lots — you can create the desired matrix, and a supplier can export it, fill it in, and upload it at their leisure. You can also output reports and awards in Excel for further analysis or imports into other systems.
  • Easy Integration with their Other Tools
    They have two other tools — categorydojo, which we will cover in our next post, and innovationdojo, that you can read about on Spend Matters UK. While SI is, of course, a big fan of Innovation, and innovationdojo is innovative within the e-Sourcing space, these types of tools have existed in IT for quite a while now so the doctor isn’t all that excited about the shiny new e-sourcing friendly wrapper they put on what was an IT / product management tool (which, the doctor will admit, are as typically as ugly and unfriendly as you can get, but when you grew up with a green command prompt on a blac screen, you just get used to ugly UIs).
  • Award ExportOne click export to Excel OR their categorydojo, where you can compare your sourcing event plan and projected savings to actual savings and increase your accuracy year-over-year!

And since this takes us into Part II, we’ll end our initial discussion of marketdojo here.

* They are based in the UK, so if you try it out in the evening in North America, the sales team will be at home and won’t be online to ping you to even see if you want to chat.

 

Keelvar: Are They Right For You?

As a preamble, in today’s post we’re not going to discuss whether or not optimization is right for you because the answer is an unqualified “it is” because there does not exist a vertical that is unable to benefit from an appropriate optimization solution that supports the right model. If you are a 100M+ company, you should be using optimization. Maybe not on all categories, because you don’t source categories where the return doesn’t exceed the cost of the effort, but on the large and strategic ones.

Instead, as a follow-up to yesterday’s post, we are going to discuss whether or not Keelvar is right for you.

Right now, most of the companies that use optimization are in the high-end of the market, with a few leading companies at the high-end of the mid-market dabbling in it. Furthermore, most of the optimization solution vendors out there are focussing on this market. As a result, as per a previous post, most of the mid-market is not using optimization because they see it as too costly and too difficult. Seeing this, Keelvar decided that what was needed was a solution that was focussed entirely on the mid-market and, more specifically, at the lower end of the mid-market. That’s the solution they built.

This has advantages, in that they have a large market they can go after, and disadvantages in that the simplifications required to make the solution useable by that market limit the solution’s flexibility and power for large problems that require complex models and powerful solutions capabilities. But since the high end market already has good solutions, that’s okay. Given the different needs of the lower mid-market, the higher mid-market, and the global multi-nationals that need almost customized solutions, and the different needs of well-staffed and well-educated Supply Management organizations and poorly-staffed organizations that need to augment their solutions with a lot of services, there is still plenty of room in the market for a new entrant as even the six market segments just defined (3 tiers, without services and services required) aren’t adequately covered by the current players.

So if you’re in the lower-end of the mid-market and you’re ready to start optimizing your sourcing, you should head on over to Keelvar’s site and check them-out. The solution might just work for you, and with event pricing starting in the low five figures and unlimited annual licenses starting in the extremely low six figures, it won’t take long to see an ROI — especially since Keelvar makes optimization affordable on an event basis on categories as low as 500K to 1M and on an unlimited basis on categories as low as 100K to 250K (because if you have an unlimited license, why not use it on every event — it doesn’t take long for 10K savings to add up!).

Keelvar: Strange Name. Uncommon Results.

In our last post we talked about a new entrant to the Strategic Sourcing Decision Optimization arena that was about to take up the education gauntlet. That new entrant is Keelvar. A spin-out from the 4C research laboratory in the Department of Computer Science at University College Cork that raised 750K Euros in 2012, it was formed as a Software-as-a-Service (SaaS) company to help purchasers establish a balanced and cost-effective outcome between large and small suppliers, which can be critical to indigenous industry by way of a price-gathering mechanism that supports communication of creative ways in which waste can be removed, helping government departments and multinational companies reduce costs. (Source: Silicon Republic)

It does this by augmenting its auction and RFX-based technology platform with true strategic sourcing decision optimization technology, but doing so in such a way as to hide the inherent complexity from the average buyer. Unlike many competing solutions on the market, the Keelvar UI is designed using a wizard-based workflow that guides the user in the setup of a combinatorial auction that is then solved using an optimization engine that uses a mix of solver technology developed at the 4C research laboratory and commercial solvers.

The solution walks the user through a simple process that even an average buyer can handle. The user needs to only:

  • Define the event typeThe solution comes with a number of pre-configured event types, each of which has appropriate corresponding bid templates.
  • Select the products and services and define the lots (contracts)The bidding sheets can be auto-generated off of these templates.
  • Select the suppliersWho will be bidding? The system then sends out the appropriate auto-generated bid sheets, tagged to each supplier.
  • Accept the bidsWhen the bids are returned, the user has to specify what bids are accepted and are to be used in the scenario.
  • Define the constraints.For each pre-configured event type, the system supports a number of pre-defined constraints. These include:
    • Supplier Limits (Risk Mitigation)
      where the buyer specifies a minimum or maximum number of suppliers
    • Award Splits (Allocation and Capacity)
      where the buyer can dictate that a supplier, or the winning suppliers, get an award split, minimum, or maximum award
    • Quality/Delivery Requirements (Qualitative)
      if the model is a freight model, the suppliers can specify lead times and the buyer can insist upon a maximum lead time, etc.
  • Run the ScenariosThe solution then runs the unconstrained scenario, the constrained scenario, and outputs a report that summarizes the constrained scenario cost, the number of bidders, and how much more it costs than the unconstrained scenario.
  • Define What-If Scenarios (Optionally)The user can specify constraints to add or drop, run the scenario again, and compare it previous (and the unconstrained) scenario.
  • Output a full award reportOnce the user is happy with a scenario.

It’s as easy to use as an auction tool, which is something that cannot be said for many of the optimization solutions out there, and no math or understanding of optimization is required. Plus, it’s a true SSDO solution as it is based on solid mathematical foundations (as the scenario can be built and solved as a MILP model), supports true cost model (as some of the templates allow different cost factors to be defined), supports reasonably sophisticated constraints (and enough to meet the minimum requirements of a SSDO solution), and has what-if capability. It’s definitely not the most sophisticated or powerful tool out there, but it doesn’t need to be.

For your average mid-size company at the lower end of the range, the solution gets the job done and does it in a way that the buyer can understand. There are thousands upon thousands of companies out now that don’t need more than this.

So if you’re in the lower-end and you’re ready to start optimizing your sourcing, you should head on over to Keelvar‘s site and check them-out. The solution might just work for you.