Category Archives: RFX

AECsoft: SIM-Powered e-Negotiation, Part II

In our last post, we discussed AECsoft’s Supplier Information Management platform, which is one of the oldest and most mature solutions on the market (with R&D starting on some aspects five years before CVM Solutions hit the scene in 2002). It stacks up very well in terms of basic SIM capabilities, although some of its competitors like CVM Solutions and Aravo, which chose to stay SIM-centric and to integrate more data feeds (which may or may not have value to your organization, as these feeds will get very specialized after a certain point and have no value to the vast majority of businesses) or more customized program management around SIM-based programs (like compliance, sustainability, and risk), are deeper in terms of specialized SIM applications. However, it’s the only major SIM player that also offers a complete, tightly integrated, e-Negotiation management suite as well which makes it a compelling solution for the mid-market in particular who may not have the money for a best-of-breed SIM platform and a best-of-breed e-Sourcing platform and who can do without decision optimization (or do it on a project basis when needed with a vendor that has a project model) and a pricey data warehouse driven spend analysis solution. (And while I would argue that no-one can do without good spend visibility, for some companies, who don’t have the data and analysis skills in house, sometimes the best solution is a consulting firm who has access to the best spend analysis tools and who does an spend and opportunity assessment for you on a quarterly basis.)

As with most suites on the market, the entry point is a management dashboard that gives you the status of all of your RFX’s (draft, pending, open, closing), auctions (draft, pending, open, closing), vettings (AECsoft’s terminology for compliance [verification] projects), and projects (which is AECsoft’s terminology for any SIM or sourcing project).

The RFX is workflow driven, and guides you through the process. It starts with configuration (title, number, currency, standard payment terms, project dates, etc), description, details, and contact information; moves on to user (buyer representative) selection, supplier invitations, prerequisite definitions, and document attachments; then to actual RFI/RFP/RFQ construction (which can include internal components); and finally to supplier delivery, response evaluation, and (scorecard) summarization. The advantages of the platform is that it can automatically pull in all supplier and product information related to any invited supplier, which makes construction simple and minimizes the pre-qualification and supplier survey effort (as the supplier will simply have to verify that the relevant data is still current and accurate), and automatically push any updated information back to the repository or into an e-Auction if the RFX is being used as a pre-qualification for the reverse auction. The auction tool, which is basic, is similarly straight-forward. One of the big advantage that both tools have is that all RFXs and Auctions can be scheduled, repeated as many times as you like, and fully automated. Some of their clients hold in excess of 40,000 sourcing events a year! Every day they’ll automatically push out a group of items in a category to a pre-qualified set of suppliers (with which they have standing offers) for updated bids. Some items will be pushed out weekly, some monthly, and some quarterly … depending on the category and how often prices tend to change. This allows them to focus the majority of their time on those few dozen to few hundred events which are truly strategic. As you can imagine, this feature is particularly useful in a vertical which does a lot of spot-buys to get best market pricing in categories where prices tend to fluctuate regularly or where prices tend to drop continuously (such as in electronics and computers).

The platform also includes decent library management functionality which can be used to easily track and find projects, documents, templates, vetting groups, and currency exchange rates. The master document library, which tracks all of your documents through meta-data, supports versioning and full meta-data search, and also forms the basis for the limited contract management capabilities offered by the platform. The platform can track your contract templates, contracts, and all relevant metadata, associate the contracts with suppliers, and generate alerts at renewal time.

The platform contains basic scorecarding functionality, built on the same capabilities used to weight and score RFXs. Scorecards can be on suppliers, on buyers, and filled out by buyers or suppliers. They can be filled out by a single individual, or by a team, and the results averaged. Each section can be weighted separately to compute the final score.

Finally, the platform, which can be extensively configured by the AECsoft development team, supports a decent amount of configuration by the administrator within the product itself. Administrative buyers can define and alter workflows, system settings, (SIM) menus (and data categories), permissions, user accounts and roles, category and sub-category questions, commodity codes, dashboard displays, and basic report configurations.

Share This on Linked In

EC Sourcing Makes Sourcing Easy and Affordable

Today I’m going to briefly introduce you to yet another e-Sourcing company that you just might want to consider if you’re a mid-market company who has yet to adopt a sourcing solution and wants to get started with something that’s easy to use, easier to manage, and easier still on the budget. With pricing starting around 3K a month (depending on the size of your company and the number of licenses you need), you can get full access to a basic e-Negotiation suite with RFX, Auctions, Project Management, a Contract Repository, and Corrective Action Reporting with the EC Sourcing Group solution. And while it may not have as many features as some of the other platforms on the market, it doesn’t have the price tag either. (A number of companies quote twice as much for fundamentally the same functionality.)

In fact, EC Sourcing made a conscious decision to keep the platform as lightweight, straight-forward, and obvious as possible. Designed by sourcing consultants, they wanted a no-fuss, no muss, no training required platform that was comfortable to people familiar with Microsoft Office and Microsoft Project. They studied the process, did their research, and decided to build the 80% solution which would include everything you need and everything you would want 80% of the time. Rarely used, complex features that only cluttered the screen or confused the average user were purposely not included. As a result it’s smooth, slick, and surprisingly effective in their target market.

RFX allows you to create the RFI, RFP, or RFQ you need on a section-by-section basis, from scratch or from a template, define scoring, customize supplier views, add attachments, collectively score responses as a group, view supplier attachments, re-calculate scores based on alternate weightings, generate supplier scorecards, and view a number of different response and/or scoring based reports. As with your standard RFX, each section and question can be weighted independently, and it will even generate the weights dynamically if you would rather define priorities than try to insure that all of the weights add up to 100. You can define auto-scoring rules for questions based on predefined response selections, score manually, or score based upon the weighted average score assigned by the RFX team. You can also use formulas. With respect to RFQs, it has a number of built-in features to make bid collection and validation simple. You can define pricing formats, which can be based on custom formulas, bid validation rules, and bid tables for complex bids that involve multiple plants, currencies, or volume breaks. You can then view the bids using a number of built in reports and formats that let you see just what you need to see the way you want to see it. With all of your standard capabilities, it gets the job done.

In addition, RFXs can be multi-round and you can create custom feedback reports that each supplier can view between rounds which can let the supplier know their rank, quartile, and variance range with respect to each item or lot. And everything can be exported to and imported from Excel. Auction is built on top of RFX and includes the ability to define custom baskets (lots), sessions (for each basket), and settings (time limits, time extension rules, stopping rules, etc.). You can also configure what the supplier sees or doesn’t see. Reporting can be table based or graphical.

Project Management includes the ability to define projects — which include suppliers, users, RFX’s and/or Auctions; message with users and suppliers — through integrated message boxes and e-mails; and define notifications in addition to standard project management features — such as timelines, state tracking, and document management. And the platform includes all of your standard RFI (comparison and scorecards), administrative (suppliers, users, statutes, etc.), and bid analysis (baseline spend, pricing summary, item level comparisons, round comparisons, etc.) reports and most of the reports allow filtering on any entity row or column.

And even though they are primarily serving the US market at this point, they are expanding into Europe, currently support 4 languages, are almost finished translating languages 5 and 6, and will support 10 languages in the near future (including Unicode languages). They are also in the process of updating and streamlining the UI to keep it as simple and easy to use as possible (and beginning R&D on a brand new module).

In summary, there’s nothing you haven’t read about before on SI, except the price tag. I’ve only demoed one other solution in the last year with the same breadth of capability in a self-service SaaS model that starts in their quoted price range. And while it might not have the same depth as many other solutions, or include more advanced sourcing modules, for many mid-sized companies just starting on their sourcing journey (and many more without complex categories), it will meet their needs.

Share This on Linked In

The Role of Optimization in Strategic Sourcing – The Optimization Sourcing Cycle

This series discusses the recent report from CAPS Research on “the role of optimization in strategic sourcing”. The primary goal is to highlight, clarify, and, in some cases, correct parts of the report that are important, confusing, or incorrect to insure that you have the best introduction to strategic sourcing decision optimization that one can have.

In this chapter, the optimization enhanced sourcing cycle is enhanced. The first issue is cycle time. According to the report “at one company, the time from first exposure to the optimization concept to completion of the first pilot run was one year … this is probably fairly typical“. While this is likely true at larger companies, it needs to be clarified that while it takes some companies a while to first buy into the concept and then acquire a solution, a good provider can take you through a pilot on a moderately sophisticated category in under 6 weeks.

The typical cycle times for each activity in the bid cycle given for the example company are worth noting:

  • one day to five months for internal customer engagement
  • one to five weeks for RFQ finalization
  • one day to four weeks to finalize bid submission screens for suppliers
  • one day to two weeks to permit bid revisions and close bidding
  • one to three days to clean bid data
  • one to two weeks for analysis and award recommendations

This says that cycles varied from two weeks and three days to over eight months, which demonstrates that simpler events will not take very long while you should plan for up to six months for very complicated events like rebidding all of your global freight lanes in a single project. (And yes, modern solutions are powerful enough to do just this. A customer of Trade Extensions recently conducted a self-service Billion Dollar event that consisted of 65,000 items, 60,000 transport destinations, and 400,000 bids from over 100 suppliers.)

Finally, as the report states, the total time to complete the sourcing process will be directly related to the number of scenarios tested and the number of rebidding cycles and solving the model with constraints can take from a few minutes for smaller, less complex buys to several hours for large, complex buys. Thus, the more scenarios you want to analyze, the longer it will take. However, you can still run through more scenarios in a day than a spreadsheet would allow you to do in a week, or a month, for more complex models. So while it can take a week or two to analyze all of the meaningful scenarios for a larger project, it’s a drop in the bucket compared to the analysis time if you were still using unmanageable spreadsheets.

Share This on Linked In