Category Archives: Vendor Review

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.

Don’t Overlook Enporion at the Emporium!

If you’re looking for a corporate e-Procurement solution and you’re thinking along the lines of Ketera [acquired by Deem] or Ariba,[acquired by SAP] be sure to include Enporion [acquired by GEP] in the mix. Even though they started as a procurement consortium and technology provider for the utility industry back in 2000 when they were founded by seven utilities, and even though they used to use SAP Markets Technology, they have come a long way from their roots and now offer a fully-featured on-demand web-based procurement solution that was developed one hundred percent in house and is tightly integrated.

Their platform supports full bid management, order management, catalog management, invoice management, settlement, contract management, project management, vendor management, and basic spend reporting on all transactions executed through the platform. They have a strong technical services division that supports dozens of standard and custom data formats (including EDI, XML, xCBL, and OCI) and are capable of handling all aspects of supplier catalog management on behalf of you and your supplier.

But perhaps the biggest reason you should look at them is for their capability on the services side. Since day one they have not only been conducting sourcing events on behalf of their clients, who collectively put over 10 B in annual spend through their platform, but have also arranged numerous group purchasing contracts worth millions upon tens of millions upon hundreds of millions of dollars. Considering that few group purchasing organizations can make the same claim-to-fame, this is no small feat! With Enporion, you can be sure you’ll get the services help you need when you need it.

Getting back to the technology, certain components are deeper than you might expect given that there are providers out there with suites that do not have the depth to back up the breadth. For example, their contract manager has some best-of-breed capabilities revolving around contract creation. In addition to the standard clause library, repository, tracking, reporting, and administration – it also supports administrator, and user, defined decision trees that can be used to automatically pull together appropriate contract templates for a commodity based upon the category hierarchy, value, strategic importance, and other relevant attributes. By working through the process before the RFQ is issued, a junior buyer can be guided on what attributes are important and focus on the right issues, terms, and conditions in the RFQ and subsequent negotiations.

The entire platform is built on an underlying many-to-many hub for transaction processing that supports multiple transaction types and is capable of appropriately routing any transaction from any buyer through the platform to any supplier as required. Thus, even though it might not be much to look at (but we already know that looks can be deceiving – take BIQ [acquired by Opera Solutions, rebranded ElectrifAI] for example, any random screen on its own will not catch your eye, but ten minutes diving into its analysis capability demonstrates that it is one of the most powerful analysis engines on the market), it packs a decent punch.

Furthermore, like Ketera, they’ve also come to the realization that the future of e-Procurement is the integration of the physical and financial supply chain and they already have projects in R&D to tie the needs of the treasury into their platform. Although I don’t have much in the way of details yet, this is one upcoming development I’ll be keeping my eye on and talking to them about more in the future.

Overcome The Seven Deadly Sales Suppressors by Knowing Your True Demand

As I mentioned in my recent post Supply Chain Does Not Have To Be A Dirty Word, TrueDemand (acquired by Acosta) has recently made an effort to publicize the Seven Deadly Sales Suppressors which any organization who sells consumer purchased goods should be aware of and address. These are:

  • Out of Stock
  • Price Compliance
  • Incorrect Merchandising
  • Poorly Executed Trade Promotions
  • Damaged Merchandise
  • Unsuccessful Product Roll-Over/New Product Introductions
  • Steadily Declining Retail Orders (the “death spiral”)

If you’re a store operator, retailer, sales execution professional, or account team at a CPG company – take these to heart. Your success depends on preventing each and every one of them every single day.

So, what can you do? Let’s address each issue in term.

  • Out of Stock
    Simply put – you make sure the item is on the shelf when a customer wants to buy it! How do you do that? Inventory visibility. This involves knowing not only where the product is in your supply chain, but where it is in each retail facility. Just because product is in the store, does not mean it is on the shelf – and just because a product is in the storeroom, does not mean that the retailer’s employee can locate it should a customer have the patience to wait while the employee looks.
    Make sure your retailers are consistent not only with their shelf checking and restocking policies, but also in when they take inventory and how they organize their store room. If they have RFID at the shelf, work with them to make sure your product is RFID enabled in a compatible way. If they have problems managing their warehouse, work with them to improve it. Consider color coding your boxes or using unique symbols on each box to help them find your product should a box get misplaced.
  • Price Compliance
    Are they charging what they are supposed to be charging? There are at least two ways to ensure this is the case. You can use the traditional method and send an account representative to the store on a regular basis to check, or you can make sure you get, integrate, and monitor their point-of-sales feed in a near-real time basis (at least daily) and check that the prices charged are in the correct range, or if there are no sales for a period you projected sales, actively look into what they are charging. This may mean sending an account representative to the store once in a while, but it is much more efficient and cost-effective since you can’t afford to send a representative to every store every day for every product.
  • Incorrect Merchandising
    The best way to avoid this disaster is to have the right information at the right time. You do this through collaboration – which involves – gasp! – having the right supply chain systems in place that enable your people around the globe to connect and work together at any time on any issue as soon as it surfaces – before it becomes a problem.
  • Poorly Executed Trade Promotions
    The best way to ensure your promotion goes as planned is to have smooth collaboration between your account teams and your retail partners. The best way to do this is to use communication and collaboration technology to work together. Furthermore, you’ll get the best results if you spend more time working with the retailers, or retail locations, you’ve had problems with in the past. And the best ways to identify these is to use predictive analytics that analyze past promotions. (In other words, the key is again the right supply chain systems.)
  • Damaged Merchandise
    This involves making sure the products are not defective when they are shipped and that your logistics and distribution partners know how to handle them properly during shipments and delivery so they don’t become damaged. In other words, good quality control up front.
  • Unsuccessful Product Roll-Over / New Product Introductions
    The key is effective change management. Good processes backed by enabling technology will again save the day!
  • Steadily Declining Retail Orders (the “death spiral”)
    Well, this is the ultimate issue, isn’t it? It’s the only one where you may not ever know the true reason, unlike most of the previous problems which can only have a small number of reasons which can each be identified and mitigated in advance.
    However, with a bit of elbow grease and the right technology, you can remove almost all risks but one – demand. Perceptions, wants, and financial situations can change overnight for reasons beyond your control, so you can never truly control demand. However, you can make sure that orders aren’t declining because you’re out of stock, that they aren’t declining because the wrong products are targeted to the wrong markets, and that they aren’t declining because the products are of poor quality, etc. Furthermore, you can take active efforts to manage demand by using JIT production, reserving capacity, and setting the right price point so that you can minimize the risks.

In other words, there’s rarely a good excuse for lack of sales at the shelf as each of the Seven Deadly Sales Suppressors can be adequately addressed – especially if you have the right technology that enables you to do so.

What’s the sound of a lost sale? It’s not cha-ching!

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.

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.)