Auxionize is a very interesting new source-to-pay marketplace, with optional managed services, for the SME and MM indirect and off-the-shelf direct sourcing/procurement organization that gives buyers the 80% of what they need in a Source-to-Pay platform at a fraction of the cost of a larger mid-market/suite offering. (Small organizations (up to 5 buyers, only a few auctions a month) that might think they can’t afford a modern sourcing tool can start with an ultra-basic plan that starts at 600 Euro a year and MM organizations can get a decent sized solutions with the core modules starting at 2,500 Euro a year (and an all inclusive unlimited use solution for 1,000 Euro to 2,000 Euro a month, fitting it on their P-card). (And for twice that, they can get a fair bit of managed services to augment their team and significantly increase their sourcing throughput. And if they are a MM with a 8K to 10K monthly budget, full platform with more-or-less unlimited use and unlimited services for an average mid-sized organization’s needs.)
Auxionize, which is based in Sofia, Bulgaria where it was founded over a decade ago and where it launched its modern S2P-powered marketplace about 5 years ago, takes advantage of being a low-cost locale with a relatively high level of education, as it is in the EU, and its costs are half that of most major US or EU locales. Moreover, since its platform is designed for high efficiency throughput, it can keep its service costs low and service levels high and provide SMEs and MMs what they need (and the majority of what they want) at a price point they can afford. (Moreover, their sales organization is now US-led, so North American companies can work on their timezone.)
In order to discuss Auxionize, we have to unpack that first sentence. When we do, we see it has four primary offerings:
- product catalogue (that powers the)
- marketplace
- source-to-pay
- managed services
Product Catalogue
The Auxionize platform is built on a detailed product catalogue that provides very detailed descriptions for standard products and parts (which is why it’s also a good direct sourcing platform for off-the-shelf manufacturing as you can specify complete part details that are precise enough for standard manufacturing). They have a very detailed taxonomy that is built on top of the Product Information Management (PIM) of icecat that they use to organize standard products defined in the icecat PIM as well as custom products defined by buyers on the platform (which can be public or private, and will be public if supplier defined and may be public if buyer defined). For every product, you can define its features, materials, weight and dimensions, and other standard information specific to its category. Even for a screw their default profile is material, thread type, head shape, length, manufacturing standard, surface finish, diameter, grading, etc. For stationary, they will capture the weight, thickness, opacity, strength, brightness, tear resistance, tone, finish, etc. will all be captured — as will the expected packaging (size). And so on. (And if they don’t have a template, you can copy the closest one and add what you need to specify your product or part — and, as a result, can specify any part you need for indirect or off-the-shelf direct sourcing and procurement.)
The catalogue currently has over 250,000 parts, so if what you want is a standard part or product, it’s probably already in the system and very quick for you to get going on a sourcing event.
Marketplace
Auxionize started out as a marketplace before it realized that a marketplace wasn’t the right solution for sourcing and strategic procurement, but realizes it is still a valuable solution for companies just needing to do spot buys or identify suppliers to invite to a sourcing event. As a result, it’s a traditional marketplace that is free for sellers and free for buyers to search, but they need to be a (paying) customer to run an event (and make a purchase, which can be a sole-source RFX for a spot-buy).
All a supplier rep has to do is sign up, create a company profile, wait for it to be verified (in the appropriate commercial register), and then create their catalog (which can be uploaded from csv files that use the template format that can be downloaded). If the suppliers need help, Auxionize has premium plans and pay-as-you-go managed services. Their products are then in a public marketplace that all buyers can search. (And, to be clear, a company can be both a buyer and a supplier on the platform, although most sellers are not yet buyers [as with any marketplace].)
Source to Pay
The platform supports standard e-Auctions and RFX (that they call pre-auction) for sourcing, award generation (which can be used to automatically generate the meta-data for the contract once it is uploaded into the system — note that the Auxionize platform does not support negotiation, and only provides a contract repository where you can associate orders, attach related documents, find associated orders and their associated invoices], and manage alerts and notifications around milestones, renewals and expiry), order creation and management, and invoice acceptance and management (as the system ends at ok-to-pay). It also provides suppliers with a portal where they can access the sourcing events they are invited to, see their orders, and upload their invoices over a secure channel.
(Pre) Auction
The core of the platform is the (pre) auction platform that the buyer uses to set up a sourcing event and that walks the users through the seven necessary steps (and doesn’t let the user publish the RFX [pre-auction] or auction until it is complete and issue free. But before we can discuss the seven step setup process, we need to discuss IPS — Integrated Product Specification.
Integrated Product Specification
Sourcing events in the Auxionize system are for complete product specifications, which consists of a (marketplace) product catalog item the buyer wants to obtain along with all of the additional specifications necessary to source that item. This will include a buyer product specification — which wraps the standard catalog item as a buyer item with internal identifiers, documents, drawings, specifications for environmental or regulatory compliance, and any additional non-standard specification — and the purchasing specifications (quantity required, unit, minimum order quantity, warranty requirements, currency, delivery location, payment terms, etc.) as well as (internal) purchasing strategy information. At this point, general terms and conditions, drawings and specifications, and general notes can also be associated with the item.
Auction Setup
Once the buyer has created one or more internal product specifications, the buyer can create a (pre)-auction following the seven step formula built-in to the Auxionize platform:
- Users: define the users who will have (read) only access to the sourcing event (once published)
- IPS: select the items, defined by IPS, that will be sourced; they can be grouped together (into sheets) if desired
- Type: RFX (Pre-Auction) or (Reverse) Auction
- Rules: the auction configuration / settings including, but not limited to, access (open, controlled, closed); award rules (product, group, all); visibility (sellers, products, prices); extension period and max offers in that period; etc.
- Access Control: which suppliers, and which of their representatives, have access
- Documents: upload any (additional) documents required to specify the sourcing event, terms and conditions, etc.
- Notes: add any final notes and instructions for the sellers
Once each step has been completed, with minimal, acceptable, definitions, then the event can be published and sellers can start bidding. Once the ending time, with any extensions, has been reached, the buyer can see the bids (side by side) as well as the (default) awards as per the award rules they defined in the setup (but which are hidden from the sellers). They can accept the default allocations and generate an award (which can be output for contract negotiations and which can be used to auto-index a contract, once signed and uploaded, with meta-data once it is associated with a previous sourcing event).
Note that once the auction is live, the sellers have access to a public forum to ask questions and get answers, as well as a private channel to send and receive private messages.
Order and Invoice Management
Once a sourcing event has been completed, the buyer can create one or more orders against it and send the order to the selected seller(s) — and continue to do so over time. The order is pushed into the supplier portal and sent to the supplier in an email. Once the seller has shipped the order, they can upload the inovice to the buyer direct to the system (and if they have the original order email, they can click the provided link to go right to the upload screen). (Unlike some competitors, they don’t allow email submissions because they detected multiple man-in-the-middle attacks in the past.)
If desired, Auxionize can be integrated with the ERP (in a custom project) and push orders direct to the ERP.
Odds and Ends
Supplier profiles right now are limited to basic company profiles, and if the supplier a buyer wants isn’t in the system, they can invite the supplier with a simple email.
In the next version, if the buyer negotiates a contract for something that wasn’t sourced through the system, the platform will use AI to automatically extract all identifiable metadata it has confidence in, negating the need for the buyer to manually enter all of the metadata (and instead just override any metadata that wasn’t identified to the buyer’s liking). In the current version, if the contract isn’t associated with a sourcing event, the buyer has to enter all of the metadata manually to store the contract.
The platform also computes the projected savings from each award based on the current average market price and tracks the contribution from each project, buyer, and department over time.
Once a buyer has done business with a seller, the buyer can leave a simple rating on a 5-star scale that contributes to a public supplier average that can help all buyers select trustworthy, reliable sellers in the marketplace.
Managed Services
Finally, Auxionize offers managed services that will help the buyer create their ISPs, create and run their auctions, negotiate their contracts, upload and index them, create the orders, and see whether or not a supplier has accessed the order or responded. These services start as low as 1,000 Euro a month for a buyer that runs 5 auctions or less, on a limited number of ISPs, in the EU timezone. Most smaller mid sized clients can get all the managed services they need for about 5K Euro a month (as most still only run a handful of events for a small team of users), or the cost of 1 FTE.
All-in-all, Auxionize is a fairly extensive mid-market offering at a great price point for small and smaller mid-sized organizations that might think a modern, foundational, source-to-pay platform is out of their grasp (and services a pipe-dream).