Category Archives: Vendor Review

Basware: P2P for the Global “E” Part V

When we last discussed Basware two years ago, we did a deep dive into their solution, particularly with respect to their invoice and payment plan capability, their Basware Commerce Network (BCN) and supplier/buyer portal, and their analytics offering. You can review this coverage in our four part series: Part I, Part II, Part III, and Part IV.

Since that coverage, there have been a few updates to the platform in these areas, but the biggest news is the recent Verian acquisition that extended their procurement offering, and we’ll cover this shortly.

From an invoice processing point of view, the match algorithm has been improved, as has the interface to the invoice. The upgraded UI makes it very easy to see not only unmatched invoices, but unmatched data, the closest match purchase orders, and all associated history of both. The pop-up windows allow a user to view the invoice and PO side by side, as well as the full audit trail if need be. From a payment plan point of view, the solution supports very powerful rules that allow a payment plan to match as many invoices as needed, and be automatically paid and approved subject to the rules.

From the BCN point of view, it’s growing year over year, at a transaction growth rate of 37%+, and should be processing 250M invoices by the end of 2018 and continues to add digital signature and tax compliance as more and more countries add regulations and allow digital signatures. The supplier portals have gotten a face lift, and it’s easy for a supplier to not only manage all communication, but multiple versions of their catalog for multiple buyers, as well as multiple price lists for different order volumes.

Their analytics offering keeps getting extended and improved as well, with the standard reports and dashboards now meeting 90% to 95% of what a typical buyer or AP clerk would ever need to look at. The reports have been grouped into three categories: spend, which are focussed on actual spend; procurement, which are focussed on overall process metrics and quality; and AP, which focus on financial data, process metrics, and overall end-to-end P2P KPIs.

The spend reports capture actual invoice data and payments and summarize, among other things, spend under control in a reference period, spend by supplier, spend by category, percentage of supplier spend under control, payment terms, and top n suppliers. The Procurement reports are focussed on quality and metrics. The quality reports focus on supplier quality and summarize active suppliers, (average) quality metric summary, rank by quality, rank by category, etc. The metrics focus on value. PO counts, by supplier, and by value. Average total order time by supplier, by category, and geography. Average procurement task time (for requisition approval, PO flips, etc.) and duration. The AP reports focus on finance, process, and KPIs. The financial reports summarize cash flow, cash flow forecast, discount availability, discounted invoices, discount trend, and similar financial data. The process reports summarize invoices — open, exception free, resolved exceptions, and average resolution time; tasks and durations; and average supplier acknowledgement/response times. The KPI reports summarize overall e-Invoice metrics, spend under control, auto-match performance, on-time payment, and average cycle times. It’s a very complete set of reports.

In other words, even though everything discussed above was quite good when we reviewed it back in 2014, Basware has kept developing and improving and streamlining, but that’s not all Basware has to offer. In our next post in this series, Part VI, we will discuss the other capabilities Basware has to offer.

DirectWorks: SaaSifying Co-exprise

Co-exprise was founded back in 2004 with a goal of building a new-type of direct sourcing solution not yet available in the North American marketplace. The goal was to integrate the new sourcing tools of the day — namely RFx, auctions, project management, collaboration, product information management [PIM], dashboards — with bill of materials, supplier engagement and management, and workflow management — capabilities not found in standard sourcing tools but desperately needed by manufacturers to handle their direct sourcing needs. In fact, it was so revolutionary that the doctor described it in 2007 as the first solution on the [North American] market to make a serious, honest, effort to address the complex direct sourcing problems that other systems cannot handle because these types of problems are unique and require a distinct solution.

The Co-exprise platform was relatively unique in its day in that it was built on a number of basic building blocks, including workflow management, business process rules, collaboration technologies, a centralized repository, project management, cBOMs (collaborative Bills of Material), cost models, and analytics, that were inherent to, and invasive across, the platform. This meant that all of the technologies were integrated into one collaborative workflow where all of the common data required by a direct sourcing professional was always accessible and analyzable. But, fast forward a few years, the platform had one failing — and that was that it wasn’t designed to be multi-tenant SaaS from the ground up.

Why? Back in the early 2000s, fast internet wasn’t pervasive, third party data center and application management was expensive and, most important, manufacturers wanted to keep their proprietary data in-house and valued deep security over remote manageability. But now that cost is paramount (and SaaS is always cheaper than in-house for non-IT enterprises), the cloud is accepted, and multi-tenant SaaS managed by professionals is often more secure than the corporate intranet, the playing field has changed and modern manufacturers want a SaaS platform.

So, shortly after a regime change, Co-express decided that it needed to go true multi-tenant SaaS, and that it would re-build from the ground up … as DirectWorks. Doing this would allow them to take advantage of new web development capabilities, such as better UI and distributed processing, that might not be doable if they just tried to do a straight port. So was this the right thing to do?

Yes and No. The new platform has a very easy to use and clean UI. Is extremely simple for the mid-size manufacturers that still use a traditional BoM sourcing approach that it was designed for. It allows manufacturers to organize items into products and products into programs so that sourcing and management can be done at the appropriate level. It still has good RFQ capabilities and a supplier repository. And a graphical dashboard with reporting capability.

But it still doesn’t have many of the features in the original Co-exprise product. There are no auctions. They may not be common, but sometimes it’s the fastest way to source commodity raw materials and items at market prices. Co-exprise had a fair amount of configurability and a workflow manager with some capabilities to customize the application to the buying organization, and the new SaaS product doesn’t really have either yet. The BoM structure and sourcing process is very inflexible, and there are no hints of true SRM.

However, while the indirect sourcing platform space is quite large, the direct sourcing space is quite small. The only players are DirectWorks, Pool4Tool, and SupplyOn — the last of which is mainly oriented around electronic interfaces and document exchange (but which also includes proposal, auction, and contract management capability). And while Pool4Tool, which used to lag in usability and integration among its modules, has now caught up and surpassed DirectWorks, Directworks has managed to port over half of the capabilities they built over ten years in two years, so it’s conceivable in two more they could be back to their glory days and a major fighting force on the market. Time will tell. And SI will be watching.

For a much deeper dive into the new DirectWorks, watch out for the upcoming Pro series by the doctor, the prophet, and the maverick over on Spend Matters Pro!

Serex – Bringing Auctions Back to Procurement

At this point in time, you’d think reverse auctions would be old news in Procurement, seeing that FreeMarkets was running reverse auctions twenty years ago and the doctor has repeatedly bashed their use in strategic sourcing (because they are not strategic), but they’re not.

There are two reasons for this.

1. They have an important role to play in tactical Procurement.

and

2. Companies new to strategic sourcing are still convinced by first generation solution providers with great marketing teams that they are still the greatest thing since the spreadsheet and that the historical savings opportunities are still there.

And while the doctor would like to think that the majority of buyers of these solutions fall in group 1, the reality is that the majority of buyers fall in group 2, and, once acquired, will treat every strategic sourcing event as a nail and use the auction tool as a hammer. So if that is the case, then the buying organization better get the best damn auction tool out there (since they will still need the auction for the tactical procurement nails when they figure out there is a better way to do strategic sourcing, and will actually need the auction tool more).

And these organizations will need a useable solution. The reality is that while just about every suite and point-based sourcing and procurement vendor offers an auction tool, not all of these are good auction tools against modern standards. Many first generation tools have no way to bulk select suppliers, bulk select products, bulk upload starting bids, import historical data, bulk upload attachments, etc. — ease of use capabilities you would think that would be standard. In fact, for the most part, only the newer reverse auction tools from smaller best of breed vendors targetting the mid-market tend to have the usability one would expect.

Usability and efficiency capabilities in an auction tool is key. I’ve heard countless stories about big organizations taking 1 to 3 weeks to set up a large global auction for large bill or materials or global category in a first generation tool when that same auction could be set up in a modern tool in 1 to 3 hours.

And this is where Serex comes in. Serex is an interesting entrant in the e-Procurement space. Originally founded 23 years ago to help clients select, implement, deploy and effectively use CRM and marketing automation systems, something it still does to this day, a few years ago, after a routine meeting with a client that asked if it had systems to support buying, it decided to enter the e-Procurement space when it found out that its client had tried, and passed on, over a dozen auction and sourcing platforms because not one met its need. (Serex was shocked at this as it knew there were a lot of solutions and assumed some were good, but figured it one Global 3000 couldn’t find a useable solution, then there must be other companies in this group that couldn’t find a useable solution either.)

So, after securing beta customer support (and a commitment for monthly guidance from the CPO with over two-decades of cross industry experience in large mid-size and Global 3000’s as well as weekly buyer availability), they began development of a new auction solution that would be developed by buyers, for buyers, and used by buyers. (And it is. Serex’s first customer saved 6M in year one and since full launch this year, its first few clients have logged over 14M in savings. And this is one reason why all of its prospects are large mid-size and Global 3000 organizations, despite the fact that the solution best fits the mid-market, which they have traditionally served on the CRM side.)

The reverse auction solution was designed to enable buyers to quickly set up and run auctions through quick bidder search and selection, quick product search and selection, quicker selection of which suppliers can bid on which products, and default auction parameters (which can easily be overridden). Complete product specs can be defined or uploaded as attachments if needed. Suppliers can send detailed messages during the auction to request or offer alternate delivery dates or substitutions for quicker delivery, and a buyer can update the auction specs as needed. In addition, all auctions are saved and new auctions can be created as copies of old auctions, and then updated as needed, allowing repeat auctions to be setup in just minutes (which is valuable if a product sells better than expected and an auction needs to be repeated on short notice to meet demand). (The auction platform has a built in attachment viewer that displays standard web formats.)

And that’s the solution. With the exception of a product manager sub-component and a bidder management sub-component, there isn’t even an RFX, which is probably the biggest short-coming of this new e-Negotiation tool — because sometimes you just want a simple tool to collect bids and make a decision. This is the biggest weakness of the tool. But Serex built it in a little over a year, and can easily build it out considerably in the next year. SI expects that in two years it will more or less compete on par with the other best-of-breed e-Negotiation mini-sourcing suites aimed at the mid-market along with adding capabilities that will cause larger organizations to adopt it onside their first generation Source to Pay platforms that they are locked into (but which are not useable enough to use on the majority of procured categories).

SpendHQ: Revving Up Visibility Into Your Supply Base

When we last dug into SpendHQ back in 2014 (Part I, Part II, Part III, and Part IV), we noted how this solution has grown from a simple spend reporting tool into a fully featured spend visibility tool that tracks all of your spend over time — by category, department, and user; a category management tool that lets you dive into category spend and filter down to the items of interest, see managed vs unmanaged spend, and track compliance; and, as of the next release later this quarter, track contract meta data and do basic contract lifecycle management.

We also noted that while it was not the most powerful (ad-hoc) spend analysis solution on the market, it was a really great solution for a mid-market company without a (useable) spend analysis or visibility solution that needed to get one up and running quickly, accurately, and usefully (as the solution has more power and capabilities than the average company needs to get great results). Within 4-6 weeks, a company with no spend analysis capability can be up and running 100% and be making useful, informed decisions.

Since then, they have been hard at work improving the contract module; adding a new compliance module in the visibility engine that allows the user to instantly see, for the selected categories, the addressable spend, the managed spend, the compliance rate, and the impact rate; and a brand new vendor detail module that sits on top of their brand new supplier database that contains information on about 20 Million entities that was formed from the fusing of their database of over 7.5 M entities that they built up over 12 years of operation and InsideView’s database of over 15 Million entities. The database has basic vendor information (address, ownership, status, industry, revenue, etc.), insights (on products, services, strengths, etc.), family tree (which contains ownership, subsidiary and sibling information), and financial data. A user can also see all associated contracts in the contract module and click into the details of each one as required.

One of the gems of the platform is the new and improved Category Management module with greatly enhanced savings management capability. On a category basis, this module summarizes spend, managed spend, core list compliance, and pricing accuracy — where each unit purchased is compared against the contract price. This allows an organization to identify maverick spend and overspend during the contract (on every refresh) and address issues as they arise. Within a category, they can drill into each item and see total spend and drill into spend by location and/or buyer, allowing them to zero in on maverick spend and spend that is priced off-contract. The pricing accuracy can drill down from a category to an item if need be and track inaccuracies, undercharges, overcharges, and overall error rate (as well as overall loss).

In addition, the particular interface customization and support for MRO, T&E, shipping and small parcel spend categories, often overlooked “tail spend”, is far superior to an average product and lets a buyer not only figure out what is maverick or going to on-contract suppliers (but being billed at off-contract rates), but how the spend breaks down across base charges, fuel charges, surcharges, and so on. This allows you to drill into the cost drivers of categories and products, and attack the real cost drivers in a strategic engagement. The specific capabilities built for shipments in particular are quite good. The shipment analytics breaks costs down into accessorials, zones, and fuel surcharges so that an organization can see precisely how the spend is breaking down, where the bulk of the charges are, and where any overspend are.

SpendHQ was built for the sourcing organization that wants a best of breed spend analysis and visibility tool and support maintaining and interpreting it, with the option to engage the right expert at the right time in the right categories to maximize savings. Its more of a “savings as a service” offering than the majority of other spend analysis players, and the best results come from augmenting it with ISG’s sourcing expertise that can help identify the right category to source to maximize savings at any given time. It’s a vendor that should definitely be kept on your radar.

For a deeper dive into SpendHQ, keep an eye out for the upcoming in-depth Spend Matters Pro review [membership required] by the doctor and the prophet that will appear later this summer.

State of Flux: The Flux Capacitor is being designed for the Future … of SRM!

State of Flux is a provider of Supplier Relationship Management (SRM) software and services that was founded in London (England) in 2004 to focus on an overlooked area of supply management, supplier relationship management. When it was founded back in 2004, most companies were just starting to offer supplier information management (SIM) solutions, which were a pre-cursor to the KPI / scorecard-based supplier performance management (SPM) solutions that followed. Only a few companies had SRM in their mind’s eyes, and State of Flux was one. What started as a very simple system for supplier information, performance, and supplier (corrective) action planning and development has grown into a full fledged supplier relationship management solution that encapsulates supplier information management, performance management, risk management, governance and relationship management, CSR (corporate social responsibility), contract, and innovation management.

In addition to their SRM services, focussed around consulting and executive staffing/managed services, and software (which was branded Statess), they have also been producing the Global SRM research report (which was covered in State of Flux has the Treatment for your SRM Ailments Part I: The Need and Part IV: The Business of Supplier Relationships) for the last seven years which provides very deep insights into the state of supplier relationship management and what the top performers do. (Last year’s report was focussed on the customer of choice, and companies that are their suppliers’ customer of choice get [significantly] more value than their peers and this year’s report will be focussed on technology, and the value it can provide, and the annual survey will be out soon.)

As we have covered the platform fairly extensively in the past (in Statess Part I, Part II, and Part III and State of Flux Part I and Part II), this post will simply focus on major improvements since the last series.

In our last series, we discussed the developments in progress, namely:

  • Prospective Suppliers
  • Contract Management Enhancements
  • KPI Templates and Drillable Scorecards

Since then, State of Flux has completed these enhancements.

  • The prospective supplier module is based on questionnaires with dynamic workflows that ensure a supplier only provides the information that is required, and cannot participate in open challenges until all necessary information has been provided.
  • Contract data and meta-data definition is now highly granular, and the version comparison feature allows a buyer to quickly identify any changes between versions.
  • The KPI templates have been completed and augmented with a wizard that makes it really easy to replicate KPIs across suppliers and organizational units, and make the minor tweaks and modifications (to the weightings, data fields, etc.) that are necessary to have the most accurate and meaningful supply possible.

In addition to this functionality, State of Flux has also added:

  • Single Sign On: that integrates with the organization’s native LDAP (or other single-sign on mechanism) to allow a user to sign-in with an existing account
  • Deep CreditSafe Integration: that integrates all of the credit safe financial and risk data across the application (including the risk and performance modules) with quick access to a supplier rating from the supplier screens
  • Automatic Risk (Severity) Calculation: that automatically computes the severity (and RAG — red, amber, green — status) of a risk as soon as the probability and potential impact of a risk are defined
  • Excel Export which enables every piece of data in the application to be exported to well-formatted Excel spreadsheets and workbooks (for import into other systems and analysis/reporting tools)

The system gets better each year, and when you combine it’s end to end completeness with the fact that there are only a handful of providers focussing on best-practice SRM, State of Flux is definitely a provider to consider. For a deeper dive on State of Flux and their platform, watch out for the upcoming Spend Matters Pro piece (membership required) co-authored by the doctor and the prophet that will take a deep dive into the platform, it’s strengths, and its opportunities for improvement.