Category Archives: Sourcing Innovation

Dear (Software) Vendor: If you Missed the Ten (+ 2 Bonus) Best Practices for Success, Time to Catch Up Now!

  • Part 1 Best Practices #1 to #3
  • Part 2 Best Practices #4 to #7
  • Part 3 Best Practices 8 to 10
  • Part 4 Bonus Best Practice #1
  • Part 5 Bonus Best Practice #2

In twenty years as an independent analyst and consultant, the doctor has never encountered a small/mid-size vendor who wasn’t doing at least one of these, usually there were a couple they weren’t doing, and the lack of these practices (and knowledge) was (and sometimes still is) holding these vendors back. In other words, you definitely should read these. We are only posting these articles once.

Serex Procurement: Easy e-Auctions for the Small Enterprise and Lower Mid-Market

Serex Procurement is a point-based solution with one purpose: to replace the spreadsheet that most e-Procurement departments in smaller companies still use to manage their procurement (as well as eliminate the thousands of emails needed to collect prices and update that spreadsheet).

You might ask why, with so many auction-centric mini-suites available on the market, and over 70 e-Sourcing solutions available, we would focus on a niche solution centred around e-Auctions, request-for-price, and centralized buyer-supplier communications. The answer is simple — not every Procurement department is supporting a large enterprise and not every Procurement department needs advanced functionality, a mini-suite, or a pricey solution with bells and whistles they aren’t going to (be ready to) use at the current state of their Procurement evolution.

It may be 2023, but there are a still a large number of Procurement departments still running Procurement events from a spreadsheet, still stuck with an archaic ERP, and, especially in the small enterprise / mid-market, still burdened with a very limited budget for Sourcing and Procurement software. Furthermore, for these departments, this single step up is sometimes everything they need from an e-Sourcing perspective at the current step of their e-Procurement journey which gives them incredible value today. (And, as per our stance that what Procurement needs is a platform that allows them to add one module at a time on their digitization journey, it’s the puzzle piece they need right now.) Also, there are organizations that bought into super suites that have an end-to-end Source-to-Pay process but no auctions, an archaic process that doesn’t support quick and easy auctions, or a user-based licensing model that prevents roll-out to the entire organization. For these organizations, a point-based auction solution with an API that supports data pull and award push through the API (or fixed-format spreadsheets where the current solutions don’t support a modern API) is exactly what they need.

Plus, the blended pricing model Serex Procurement offers makes it very affordable for companies with no budget to start on a gain share and, once the value is proven, move to a fixed price model with no gain share. More specifically, an organization can sign up for as little as $300/month by giving up 50% of their savings, or get unlimited events with 0% gain-share for $5,000/month. (Or pick a tier somewhere in between — Sourcing Innovation recommends doing the math based on the conservative end of the estimated savings on the events you will be running and picking the tier appropriately.) Furthermore, while there is a minimum contract term, an organization can upgrade their tier at any time during the contract term (once they are confident they’ll save more by upping the tier.)

The fully SaaS e-Auction solution has all of the core capability you’d expect from a modern SaaS e-Auction platform, and then some. One of the key differentiators is that the platform is SKU-based and supports the definition of SKU groups in a manner that makes it just as easy to source a direct Bill of Materials as it is to source an indirect lot of office supplies. Not many sourcing/auction platforms make it easy to do both, but Serex Procurement does.

In addition to product groups, the platform also allows the definition of bidder groups which allows an organization to group suppliers that it typically invites for a certain category (indirect) or Bill of Materials (direct). Combine this with the fact that an auction can be defined on a set of product groups and bidder groups, and this makes it extremely quick to define a new auction from scratch, and even quicker to define a new auction as a copy of a historical auction, as this only requires changing the start and end dates and times to make the copy. (Once the copy is made, a buyer can edit whatever they wish.)

As we indicated above, the auction platform supports the standard parameters you would expect, including:

  • start and end time
  • auto-extension of y minutes with a bid in the last x minutes
  • show/hide bidder position
    by setting to “hide”, the platform can be used as a simple request for price
  • tie bids accepted/rejected
  • bid increment
  • max bidder position
  • bid validation window
  • landing factors (% of savings required to leave an incumbent to acknowledge switching costs;
    basically it is a penalty factor on new suppliers)
  • shipping factor (to acknowledge additional transportation costs / currency exchange costs)
  • product yields (to account for variable wastage due to packaging/sizing)

It also supports new bidder definition, new product definition, import from spreadsheet or API for bidder or product definition, and Excel-based bidding for suppliers. Product sheets can be uploaded and attached with as little or as much information as needed, and in-platform messaging allows for easy direct or group-based communication between the buyer and suppliers.

The platform allows the buyer to setup as many email / message templates as they like, to make supplier communications quick and easy as events are created / modified. It’s also very easy to search products, bidders, and past events (to find the perfect instance of the event to copy for quick setup).

When you think about its intended market, about the only thing missing is better quick-hit RFP functionality, as the way you do it now is to set up a private price-based auction. Since they already have document management, bid sheet support, supplier and messaging support, and history management, it would be quite simple to add easy three-bids-and-a-buy RFPs where suppliers can get requests, upload their own options to fulfill a request as well as corresponding prices (at different volume breaks), and provide more detailed information and the buyer can then select one or more to either direct award to or invite to an auction with pre-certified options. Serex has acknowledged that this would be useful, and is in their queue for future development, but they are very customer driven and the queue gets prioritized based upon what current customers are asking for. However, should multiple customers converge on this, it would not take them very long to build it as they have three decades of software development and implementation experience (with the first 20 years in CRM system selection, implementation, and custom integration add/on development — an area their other division are still leading experts in).

If you are in the market niche, we strongly encourage you to check Serex Procurement out as you can get a great, unlimited use, e-Auction solution for a few thousand a month (plus modest gain share, or unlimited use platform for only 5K/month) without the need to bite off more than you can chew solution capability (and cost) wise.

The 39 Steps … err … The 39 Clues … err … The 39 Part Series to Help You Figure Out Where to Start with Source-to-Pay

Figuring out where to start is not easy, and often never where the majority of vendors or consultants say you should start. They’ll have great reasons for their recommendations, which will typically be true, but they will be the subset of reasons that most benefits them (as it will sell their solution), and not necessarily the subset of reasons that most benefits you now. While you will likely need every module there is in the long run, you can often only start with one or two, and you need to focus on what’s the greatest ROI now to prove the investment and help you acquire funds to get more capability later, when you are ready for it. But figuring out how much you can handle, what the greatest needs are, and the necessary starting points aren’t easy, and that’s why SI dove into this topic, with arguments and explanations and module overviews, both broader and deeper than any analyst firm or blogger has done before. Enjoy!

Introductory Posts:
Part 1: Where Do You Start?
Part 2: Where Should You Start?
Part 3: You Start with …
Part 4: e-Procurement, and Here’s Why.

e-Procurement
Part 5: Defining an e-Procurement Baseline
Part 6: There are Barriers to Selecting an e-Procurement Solution (and they are not what you think)
Part 7: Over 70 e-Procurement Companies to Check Out

Interlude 1
Part 8: What Comes Next?

Spend Analysis
Part 9: Time for Spend Analysis
Part 10: What Do You Need for A Spend Analysis Baseline, I
Part 11: What Do You Need for A Spend Analysis Baseline, II
Part 12: Over 40 Spend Analysis Vendors to Check Out

Interlude 2
Part 13: But I Can’t Touch the Sacred Cows!
(including Over 20 SaaS, 10 Legal, and 5 Marketing Spend Management / Analysis Companies to Check Out)
Part 14: Do Not Stop At Spend Analysis!

Supplier Management
Part 15: Supplier Management is a CORNED QUIP Mash
Part 16: Supplier Management A-Side
Part 17: Supplier Management B-Side
Part 18: Supplier Management C-Side
Part 19: Supplier Management D-Side
Part 20: Over 90 Supplier Management Companies to Check Out

Contract Management
Part 21: Time for Contract Management
Part 22: Contract Management is a NAG: Let’s Start with Negotiation
Part 23: Contract Management is a NAG: Let’s Continue with [Contract]Analytics
Part 24: Contract Management is a NAG: Let’s End with [Contract] Governance
Part 25: Over 80 Contract Management Vendors to Check Out

e-Sourcing
Part 26: Time for e-Sourcing
Part 27: Breaking Down the ORA of Sourcing Starting With RFX
Part 28: Breaking Down the ORA of Sourcing Continuing with e-Auctions
Part 29: Breaking Down the ORA of Sourcing Ending with [Strategic Sourcing Decision] Optimization
Part 30: Over 75 e-Sourcing Vendors to Check Out!

Invoice-to-Pay (I2P):
Part 31: Time for Invoice-to-Pay
Part 32: Breaking Down the Invoice-to-Pay Core
Part 33: Over 75 Invoice-to-Pay Companies to Check Out

Orchestration:
Part 34: How Do I Orchestrate Everything?
Part 35: Do I Intake, Manage, or Orchestrate?
Part 36: Over 20 Intake, [Procurement] [Project] Management, and/or Orchestration Companies to Check Out
Part 37: Investigating Intake By Diving In to the Details
Part 38: Prettying Up the Project with Procurement Project Management
Part 39: Deobfuscating the Orchestration and Fitting it All Together

Source-to-Pay+ is Extensive (P39) … DeObfuscating the Orchestration – Fitting it all Together

In our three installments last week (Part 34, Part 35, Part 36) we noted that, when you are in Sourcing/Procurement, you need to intake requests, manage projects, and/or orchestrate your technology-enabled processes, depending on what the modules/suite you have do and don’t do and what your particular situation warrants. However, we also noted, that you won’t find a single platform that does everything you need to do, and you’ll be lucky to find a platform that does even half of it. And even then, it probably won’t do more than half of that well. That’s because, as we explained, these emerging platforms typically fall into the categories of Intake Management, Procurement Project Management, or Orchestration. In Part 35 we overviewed the core capabilities at a high level, but skipped the deep dive in an effort to get you the fledgeling vendor list (which is still quite small) so you could start getting familiar with who is out there and have an idea who to investigate when the time is right.

However, once you get a shortlist, you need to be able to evaluate where the platform is now relative to where it should be and what you will need. Thus, in this installment, we are going to continue our dive into each of these three product classifications (which, hopefully, will someday become one as you need all three sets of capabilities for successful orchestration). We’re concluding with Orchestration, because once you have accepted the request and defined the project, you need to execute it.

Orchestration is, in essence, the integration of as many modules as you need into a configurable workflow that suits your specific organizational processes for the procurement at hand.

Easy Self-Serve Data Stream / Partner Module Integration
A buyer should be able to select the supported applications that they own, enter their license codes, and it should automatically integrate with the orchestration tool. It should be a single click to integrate a supported data stream (once purchased).

Low-Code Integration for Arbitrary Source to Pay+ Modules
It should be almost as trivial to integrate non-partner source to pay modules which have a well-defined (open) API simply by defining the API link, the buying organization’s unique keys, data mappings from the orchestration platform to module data tables/objects, entry and specific task links, etc. that is sufficient for pulling data from preceding modules into the application, pushing data out required for metrics and successive modules that are required in the procurement process, launching the application, quick-linking to a specific screen, and integrating the module into the appropriate process workflows.

Workflow Automation
The entire idea of process orchestration is to support the right workflows to support the various sourcing, contracting, onboarding, procuring, payment term analysis, and other source-to-pay projects the procurement organization needs to undertake. It should fully automate the workflow defined in the intake module and/or the project defined in the procurement project management platform.

Smart Progress Tracking
The orchestration module should automatically track where every single process is and when a buyer comes in, take the user to the right screen corresponding to the current step of each procurement process it is managing. It should also push the required data for process and project tracking into the intake and procurement project management modules that will allow those platforms to automatically track the current project process.

Effectiveness KPI Tracking
Whereas a procurement project management module should track the efficiency of the procurement projects, orchestration should track the effectiveness. For a sourcing project, what was the identified savings? (It should track the prior cost per unit, the estimated demand for the next year & contract term, and the identified cost per unit.) For a contract renewal, what were the cost/service/quality/etc. gains? For a catalog procurement, what was the cost savings over the prior (non-catalog) procurement? For an analysis, what opportunities were identified in what time frames? And so on.

Predictive Analytics Integration
The platform should be capable of integrating with a platform capable of doing predictive analytics around expected process times, expected performance (savings, etc.) outcomes, and other metrics the user might want to consider before kicking off a project.

Rule-Based Automation
The platform should support rules-baed automation that will allow parts of the process to be fully automated within certain constraints. For example, if it’s a sourcing project, the RFQ, once defined, can automatically go out to approved vendors, when the quotes are returned, the lowest cost quote(s) accepted, the contract draft auto generated, and so on.

Data Flow Definition
It should be trivial to define the data flows between the different source to play modules that will be used in a given procurement process.

This completes our deep-dive of the intake management / procurement project management / orchestration modules that exist today, and that we listed in Part 36.

Source-to-Pay+ is Extensive (P38) … Prettying Up the Project with Procurement Project Management

In our three installments last week (Part 34, Part 35, Part 36) we noted that, when you are in Sourcing/Procurement, you need to intake requests, manage projects, and/or orchestrate your technology-enabled processes, depending on what the modules/suite you have do and don’t do and what your particular situation warrants. However, we also noted, that you won’t find a single platform that does everything you need to do, and you’ll be lucky to find a platform that does even half of it. And even then, it probably won’t do more than half of that well. That’s because, as we explained, these emerging platforms typically fall into the categories of Intake Management, Procurement Project Management, or Orchestration. In Part 35 we overviewed the core capabilities at a high level, but skipped the deep dive in an effort to get you the fledgeling vendor list (which is still quite small) so you could start getting familiar with who is out there and have an idea who to investigate when the time is right.

However, once you get a shortlist, you need to be able to evaluate where the platform is now relative to where it should be and what you will need. Thus, in this installment, we are going to continue our dive into each of these three product classifications (which, hopefully, will someday become one as you need all three sets of capabilities for successful orchestration). We’re continuing with Procurement Project Management, because the next step is to manage the project, which could go beyond the existing source to pay modules the organization currently has.

Procurement Project Management is exactly what it sounds, the project management of a procurement. It’s essentially project management, tweaked to support Procurement vs. just a generic project. Whereas intake has capabilities for the buyer and the stakeholder, project management is primarily geared towards the buyer.

Phases, Milestones, Tasks, Owners, Obligations, Tracking
The ability to create phases, milestones, tasks, owners, obligations, and track progress throughout the project timeline — all the standard project management functionality — as previously indicated, is a core must. Basically, anything you would expect any other project management tool to do — including team management, GANTT charts, etc. etc. etc. must be supported.

Standard Project Templates
Just like intake management must support Sourcing / Procurement Workflow Process Definition, the procurement project management module must support the definition of standard project templates for each of these processes such that there is a template for every category of good and service being sourced that can quickly be instantiated as needed for each procurement project undertaken.

Customizable Approval Flows
Depending on the category, the amount, the vendor, etc. etc. etc. the approval flow that is required may be slightly different from the default flow for the category, good, amount, vendor, etc. The module must support the definition of the customized approval flow, which can be role based, user specific, or both; parallel, serial, or both; or even process step dependent. And this approval flow must be seamlessly embedded in the project workflow, ensuring that a project does not advance when one or more approvals are needed.

Deep links into Sourcing/Procurement Products
If the procurement project management module is not capable of being integrated into the modules and tools used to execute the project, it’s not procurement project management — it’s just a regular project management tool and you might as well use the cheapest freeware/shareware project management tool that you can find as it’s not providing any value from a Procurement perspective. It must support integration into the modules that are used to execute procurements, and not just a shallow link. It must support a deep link directly into the current screen that represents the current step of the process. It must also support data pulls for metrics, alerts, and necessary pushes into subsequent modules and steps.

Dynamic Project Shifting
If, at some point, the buyer decides that the procurement should follow a different process, or, due to quotes (and likely costs) being higher than expected, the need to introduce new (potential) suppliers into the process, or the need to accelerate the acquisition, the module should make it as easy as possible to convert the current project plan into the new/modified project plan, by automatically populating the new project plan with all of the existing project configuration that can be reused. Requirements, team members, approvers, etc. etc. etc. that are capable of being ported should be. In addition, it should note that the procurement process was modified and link back to the original process that was followed, and where the buyer was in the prior process prior to the shift.

Efficiency KPI Tracking
The platform must track metrics around how long different processes generally take, down to the individual milestone and step, as well as the configuration settings and parameters (such as category, contract length, etc.) that will allow the metrics to be sliced and diced into specific metrics meaningful for a precise subset of procurement processes.

Issue Alerting / Exception Dashboards
Just like an intake management platform should alert the stakeholder and the buyer when there is a question, issue, or requirement that needs their attention, a procurement project management platform must alert the buyer not only when something needs to be done, but when a certain process step is taking longer than was allocated or than the average process time for that step in similar projects. It must make it easy to see all of the outstanding alerts applicable to the buyer and/or a particular process, as well as any exceptions that arise during a project that could cause a delay, whether or not they are to be resolved by the buyer (so that the buyer can see if they need to contact a stakeholder to see if that stakeholder needs help to keep the project moving).

A good procurement project management module will, of course, do even more than this, but as with all of the previous modules we covered in our series, we consider this the bare minimum set of functionality that a procurement project management module should support.

We still have Orchestration, so come back for Part 39.