Category Archives: Vendor Review

High Definition Sourcing – BravoSolution’s Next Generation Sourcing Paradigm

In last week’s post on Next Generation Sourcing, we discussed the need for a modern Supply Management Organization to either take its Sourcing to the next level or suffer decreasing returns. We then said that the starting point for most organizations was the acquisition, and utilization, of a modern e-Sourcing (2.0, if you will) platform that will enable an average Supply Management organization to “knock it up a notch” (even without the aid of a spice weasel).

One solution that can be used to take a Supply Management organization’s e-Sourcing to the next level is the new version of BravoSolution’s Collaborative Sourcing suite, which was first reviewed here on Sourcing Innovation last year when it collaboratively optimized its way onto the doctor‘s short list (and again in a post that described how its analysis and supplier performance management enabled contract compliance). BravoSolution was one of the provider’s that didn’t stand still last year (which was a quiet year from a market perspective).

BravoSolution has realized for a while now that Supply Management cannot meet the strategic objectives of the business if:

  • the requirements of stakeholders across the business are not met,
  • key stakeholders and suppliers are not actively engaged, and
  • non-price factors aren’t considered in the decision.

That’s why they built their RFX and Auction platform to easily capture price and non-price factors and their collaborative strategic sourcing decision optimization engine to handle scenarios that have rules and filters that can be just as easily defined on non-price factors as price factors. (For example, “At least 10% of supply must come from WMOB”, “waste must not exceed 2%, or “providers must use hybrid vehicles or biodiesel”.)

Moreover, they also realize that a generic one-size-fits-all RFX is not appropriate for many categories, especially those that are complex or that require the collection of a considerable amount of price and non-price data. They have learned that trying to force-fit “expressive” proposal requests into a simple “spreadsheet-based” RFX solution doesn’t always work. Buyers need more than the ability to define RFIs and price tables, they also need the ability do define workflows. It’s not always as simple as “fill out this questionnaire” and “fill out this price table”, especially when quality, capability, or capacity is an issue.

Consider a transportation bid for North America and Europe. If North America has nine regions and Europe has four, there are thirty-six regional pairings in North America and six in Europe. Depending on the division, there could be over fifty different state/province pairings within each regional pairing. Within each state/province pairing, there could be over a hundred lanes from a starting city/town to an ending city/town. All in all, there could be tens of thousands of lanes. Not all carriers will be able to service North America and Europe. Some North American Carriers will only be able to service Canada, the US, or Mexico. Some US Carriers will only do a region. A regional carrier may not do all lanes. If a carrier only does a few hundred lanes within a handful of regions in Canada or the US, you don’t want to ask them about every lane in Mexico and Europe as well.

In order to be truly useful to the buyer, the RFX not only needs to be workflow driven, but driven by supplier responses. If a supplier does not provide the service, they should not be asked about it. Not only does a supplier not want to click “No” or enter “0” or “NA” for every individual lane the supplier does not service, but the buyer doesn’t want to be overloaded with meaningless data. A screen full of “No”s or “NA”s doesn’t convey any useful information. Furthermore, if a supplier indicates they provide a service, such as Hazardous Material Transport, the buyer might need to collect additional details such as certifications and standards followed. But the supplier shouldn’t be asked about something they can’t deliver.

Not only does BravoSolution allow the buying organization to define their own RFX workflows, but they allow the buying organization to create their own category-specific RFX workflows (which can be thought of as dynamic templates) for specific categories or to select one of their pre-packaged ready-made category-specific RFX tools that are ready to go for common categories like transportation and packaging. Not only do these category specific RFX workflows allow a buying organization to quickly collect complex category-specific dynamic pricing and related information, but it allows for quicker analysis as only relevant information is collected. And the events go faster, since a supplier only has to provide details on what they plan to provide or service. Furthermore, for categories like transportation or packaging where pricing is often defined by mile or volume, the supplier can provide generic pricing (formulas) and then override the pricing on specific lanes or box sizes that they are optimized for. When a supplier can provide a response in a few hours online, and doesn’t need to spend a few days offline slaving over a spreadsheet, they are much more responsive.

But BravoSolution didn’t stop with a better RFX (that can pull data in from their SPM platform or last year’s projects and push data out to their auction and collaborative optimization platform, which is the level of integration required in the foundations of a “Next Generation” e-Sourcing platform), they also tackled the biggest problem in many of the first generation e-Sourcing platforms. But that’s the subject of tomorrow’s post.

For an Alternative to the Ariba Supplier Network, Don’t Overlook Ketera

Ever since Ariba decided to hike their already hefty fees, there’s been a lot of chatter about the Ariba Supplier Network on and off the blogs, including a great piece on An American Editor, reprinted here on SI, on the harbinger of getting paid.

Since that time, SpendMatters has been covering multiple Ariba Supplier Network Alternatives, including Hubwoo, Basware, and OB10, but has not made a peep about Ariba’s smaller competitor further down the valley. Now, Ketera may not be as big or loud as Basware, Hubwoo, or OB10, but they have a fairly solid offering and one advantage the other guys don’t have — a very low price point, which is critical for the SME market who can’t afford $20,000 a year just for the privilege of transacting online, which is not even close to new technology anymore.

The Ketera Network is a lot bigger than one might think. While they haven’t reached a Trillion dollars in transactions yet, 50 Billion is nothing to scoff at and with over 100,000 buyers and over 1 Million suppliers, it has reached a respectable size and is still growing.

And, most importantly, it’s very cost effective. It’s essentially free to try, as a seller can list for free using their Amazon-like model and pay 3.5% of the sale, and as soon as the seller closes in on $7,000 in sales, the seller can upgrade to the premiere membership which, at $25/month or $250/year, costs the seller less than pennies on the dollar, and quickly becomes a much more affordable alternative than the ASN at the $16,130 mark. For example, even though (to the best of my knowledge) Ariba limits the transaction fees they charge a seller to $20,000 a year, a seller has to do 1.29 Million in business before the cost drops below 15.5 basis points.

The following table should help an organization evaluating their options put the networks in perspective:

Network Ketera Network (KN) Ariba Supplier Network (ASN)
Service Level Sponsored (Private Buyer Catalogs) Public Listing (Amazon-Like Model) Premiere Membership Standard
Service Cost Free 3.5% of Sales 250/year 0.155% of Sales, up to $20,000
Good When only selling via private catalogs to KN buyers doing less than $7,143 of public sales doing more than $7,143 of public sales doing (considerably) more than 1.29M of sales per year with Ariba buyers

And the following table should help an organization understand the relative costs of the KN Premiere Membership vs. the Standard Ariba Supplier Network Membership:

 

Cost Per Dollar of Sale
Sales Volume KN ASN Winner
10,000 0.02500000 0.01550000 ASN
16,130 0.01549907 0.01550000 KN
100,000 0.00250000 0.01550000 KN
1,000,000 0.00025000 0.01550000 KN
1,300,000 0.00019231 0.01538462 KN
10,000,000 0.00002500 0.00200000 KN
100,000,000 0.00000250 0.00020000 KN
1,000,000,000 0.00000025 0.00002000 KN

 

The Ketera Network may not be right for everyone, but it’s something every SME should definitely investigate.

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Maybe Coupa Should Build a Coupe

I recently gave Coupa a bit of a chastising in a recent series (Part I, Part II, and Part III) for failing to impress me with the rate of innovation ever since Dave Stephens left, as it looks like they’ve spent most of the last year developing flash (UI) and not substance (functionality).

But maybe that would be the right strategy for Coupa. Let’s look at the reality. There’s a large market out there consisting of companies (mostly mid-size, but some large and small) that have never used anything resembling a (modern) e-Sourcing or e-Procurement solution. At most of these companies, they don’t even know the difference between e-Sourcing and e-Procurement. All they know is Google and Amazon, which we all know are not the F-350’s of the B2B world.

At these companies, something that looks like an Amazon, searches like a Google, and connects like a Facebook goes over well. (After all, they’re not cricketers, and don’t know the perfect recipe for B2B canard a l’orange.) They don’t know that real e-Sourcing involves sophisticated analysis and negotiation techniques or that real e-Procurement is actually a nine-step process built around time-tested best practices to insure that the organization orders the right product at the right time in the right quantity off the right contract at the right price. They still think that ordering office suppliers and commodity electronics online is B2B e-Procurement. Forget about the fact that some of the old-time sourcing pros are claiming that strategic sourcing is dead, these companies haven’t even progressed far enough along the commerce curve to know what strategic sourcing is!

In other words, this market has no idea why it needs an F-350 work horse, and would thrilled to be getting a Chevy Cobalt. If Coupa adopts a keep-it-simple strategy, instances of their platform will sell like hot cakes, and Coupa will do great, as long as they don’t discover that there’s a major fault in the power steering five years down the road after almost one million (1M) seats have been sold.

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Intengo – Doing the e-Sourcing Tango in Turkey

Intengo is a relatively new provider of e-Sourcing/e-Negotiation solutions that first appeared on the scene in it’s Native Turkey in 2006, after being founded in 2005. Like b-pack in France, it’s just starting to expand internationally, focussing on Europe first with translations to Spanish, French, and German (in addition to its native Turkish and new English language support) currently in the works.

Intengo provides an on-demand e-Negotiation platform built around (multi-round) e-RFX and e-Auction with a sprinkling of supplier information management (SIM) and catalog management thrown in. Their tool allows you to mix and match RFX and Auctions in successive rounds as you see fit. You can start with a baseline RFP, invite qualifying suppliers to an (English, Dutch, or Japanese) auction (with more variants in the pipeline), then return to a sealed bid RFP with the winners in a final negotiation around*1. It’s quite flexible and allows the organization to tailor the e-Negotiation event to their way of conducting negotiations.

It is extremely quick and easy to set up a new event, or “project”, in the system as the process is wizard-driven. It’s literally as easy as:

  1. define the basic informationevent name, details, manager, dates, and type
  2. define what the bidders can and cannot seecompetitors names, prices, ranks, etc.
  3. define the basic information and the ruleswhich can be from a template or custom defined
  4. define the itemswhich can be selected from the hierarchical catalog or defined on the spot
  5. select the supplierswhich can be selected from the supplier master or defined newly for the event
  6. define boundary parameters and extension rules (for auctions) min and max bid increments, reserve prices, etc.

One of the jewels of this solution is that the auction dashboard is jam-packed with information but yet designed in such a way that it doesn’t look the least bid cluttered. The buyer (and the bidders, with appropriate permissions) can see full event configuration details (starting, ending, extensions & rules, whether or not names and prices are hidden, etc.), current supplier rankings and percentage changes for each bid (in each lot), all bids for each item (with the lowest bid highlighted in green, and the changes from the last bid highlighted in yellow), the countdown clock, and a progress / trend graph. The bidder can also easily access the configuration screen through the management tab to extend the auction and the entire bid history through the bid list tab.

Other hidden jewels are the calendar view, which integrates with outlook and hot-links to all of the relevant screens in the relevant projects, item level multi-currency support, where the buyer can choose to define the currency or leave it open for the bidder to choose and where the buyer can choose to accept the default rates from the central bank or override with manual rates, smart unit support, fine grained access control for corporations or governments that need to limit who can see what, and the ability to easily do bulk updates on (filtered) lots so that a bid decrement (fixed or decrement) can be applied to all bids in the lot. (In comparison, many of the “commodity” auction tools don’t have fine-grained multi-currency control, automatic unit conversions, or such granular access control.)

And while the SIM and Catalog Management is basic, the user can define custom hierarchies and include supplier ratings, which is more than sufficient for many mid-market companies that still haven’t even touched modern e-Sourcing platforms. The major weakness, which is common to many of these platforms, is the lack of a custom report builder. There are built-in reports, and Intengo can build custom reports for any company that wants them, but no ability for a customer to build her own report. However, they do have Excel integration and a buyer can dump all of the information to Excel and construct her own reports which is a decent workaround if the user knows how to build a good template (where it’s just a matter of importing the exported data as needed).

They also have integrated messaging (and the ability to send e-mails), reasonable attachment management capabilities, and a moderately powerful administration section where a user can update the company profile, update their personal profile, define display settings, manage users, add and update templates for RFXs/Auctions/Projects, define additional units, input custom exchange rates, and modify the configuration profiles. All in all, it’s a solid tool for the mid-market, and one that they can offer at an affordable price-point as they are a SaaS solution. If you’re a mid-market company in Europe who is looking for a solid e-Negotiation platform to get started on the e-Sourcing path, you should definitely consider inviting Intengo to the table.

*1 If you take this approach, be sure to remember your auction ethics where you tell your suppliers up front that the winner of the auction doesn’t necessarily get the award as the auction will be followed by a final negotiation round with the top X suppliers. In addition, this strategy should only be employed in categories where you intend to split the award between two or more suppliers from the get go for risk mitigation.

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FieldGlass is Determined To Take Off In the Tens

FieldGlass, which provides a unified platform for contingent workforce management, service provider management, and direct hires, is determined to tear forward through the tens, which also happen to correspond to its second decade of corporate existence. Founded in Chicago in 1999, it celebrated its tenth birthday with a bang by adding 33 new customers in 2009 before tearing into 2010 and adding over 30 new customers year-to-date to double its customer base in less than two years.

With localized support for sixty-three (63) countries and counting, over one third (33%) of the new customers it has added in the past year were from outside the US — and they expect this number to rise over time as they add more satellite offices in various countries and continue to add localized support for more countries. And like Coupa, which happens to be one of the many enterprise platforms their solution can peacefully exist with, they plan to keep up the fervant pace of customer acquisition for some time to come.

So how are they pulling this off? It’s a combination of

  • persistence like the little engine that could, they just won’t quit,
  • technology they have a solid platform which gets better every year,
  • limited competition Google might return over 100K hits for contingent workforce management, but only a few players (like IQ Navigator and Taleo) have platforms in the same class,
  • a truly global focus their localized support (which includes local laws, regulation, and policy) for 63 countries and counting is a differentiator, and
  • the economy since no one wants to hire direct full time employees anymore.

So what have they done since our last update last April (which followed the incredibly deep coverage brought to us by the Sourcing Maniacs in their 2008 vendor tour)? Two things of note: they finished flushing out their core BI suite and started working on Active Guidance. And while the latter is still in its infancy, it will be very useful when taken to the next level.

Their BI offering consists of three core capabilities:

  • intelligent benchmarkingacross equivalent job categories in equivalent locations,
  • drill down reporting which lets the user drill through the various spend cubes maintained by the application, and
  • visualization which presents the user with innovative graphs, comparative dashboards, and informative trends.

Most of the work has went into improving the benchmarks, to make sure the industry averages presented are for equivalent jobs in equivalent locales, and extending the visualizer, to try and find the best ways to present a lot of information in an easy to understand, but yet impactive, manner. In a few cases, they’ve really hit the mark. The first case is the country-based graphs which allow a user to see relative spending by state on a geographically correct map. These graphs take the concept of Shneiderman diagrams (or visual crosstabs) to a whole new level. The second case is the integrated trend graphs that allow you to simultaneously see the trends across contingent worker, service worker, and direct hire for any job position or category. This is important because whenever spending drops sharply in one category, it tends to increase significantly in another. (Can’t hire any new workers? Service workers. Can’t sign another long term contract with a service provider? Contingent workers. Contingent workers been here too long? New hires.) The third case is the comparative rate-range graphs which simultaneously present the average rate, the range, and the market average for a set of related positions — it makes it really to easy to see where the company is likely spending too much for its contingent and service labor.

However, what is really interesting is their new focus on “active guidance”. Having deep insight from meaningful benchmarks and comprehensive spend reports is one thing, but knowing what to do — and when to do it — is another. For an organization with thousands of contingent and service workers, this can be a challenge. To this end FieldGlass has launched new capabilities that is has bundled under the heading of “active guidance” with more in development. The three capabilities it has launched to date are:

  • Rate Guidanceusing the benchmark data and spending history, the platform will advise the user on the recommended rate range to associate with a contingent or service position,
  • FieldGlass Advisorbuilt on top of their alert functionality, the advisor will let a user know when a certain action should be taken (such as initiating a request for additional funds or to extend a current position), and
  • The Project Management Office Dashboarda quick summary into the past due, current, and forthcoming tasks that require the users attention with respect to payment and procurement, the dashboard is built on top of dozens of user configurable thresholds relating to processes, documents, and spend tracked by the system.

As FieldGlass continues its quest to automatically identify trends and associate them with suggested behaviors,this role-based feature should get quite interesting. The holy grail of performance analysis lies in the ability to take tactical data and derive meaningful strategy.

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