Category Archives: Sourcing Innovation

Iasta: Smart-Source Style! Part III

It’s been a while since Part I, where we covered the inclusion of native analytics capability, improved native contract management capability, and better integrated SIM & SPM capabilities in the Iasta platform and Part II where we covered extensive support for third party data feeds, P2P integration capabilities, and customizable reporting, but that doesn’t mean Iasta has been sleeping. Since then they’ve had a new major release, and a few minor releases, of their platform, which have included the following improvements:

Extended and Streamlined Project Management
One of the big changes was the ability for an organization, and a user, to define configurable project fields with whatever information they want to track — and all of the user-defined fields can be included in scorecards and analytics. So, in addition to name, start date, end date, etc. you can have custom sub-types, budget codes, execution hours, etc. The project team can be defined by role, with as few or as many roles as you like, and each role can have the user assigned, and re-assigned, as necessary.

Furthermore, setting up a project is a quick 5-step wizard-driven process:

  1. Basic Project Metadata
  2. Project Team and Customized Fields
  3. Project Classification and Value
  4. Bid Type, Display Settings, and Additional (Optional) Project Properties
  5. Lots and Items

Executive Analytics

In addition to the standard Smart Analytics module that was introduced in version 8, Iasta has added a new Executive Analytics module built on top of the Smart Analytics module that includes a set of dashboards with the most commonly requested executive reports and requests split into sourcing, scorecard, contract, profile, and trending dashboards.

In addition, each user can define their own dashboards with their own reports on any data fields associated with any data element from any project, supplier, contract, scorecard, etc. they have access to. New dashboards that can come pre-packaged with the solution include diversity and savings tracking dashboards. If you integrate an e-Procurement or Accounts Payable system feed (with a daily or weekly update), the reports on the savings tracking dashboard will compare actual versus projected spend and show you captured versus projected savings.

Excel Bidding & Embedded Optimization

Not only can bids be submitted in Excel, but Iasta finally added the ability to define individual bid fields in an Excel spreadsheet and upload complete bids broken down on all relevant cost dimensions – unit quote, shipping, tariffs, surcharges, etc. In addition, the optimization module, which used to be stand-alone (and which required projects to be imported to build models), is now embedded in the main suite and it’s easy to switch to the optimization tab and pre-populate a model with bids collected in an RFX.

Streamlined Supplier Portal

One thing Iasta has learned is that, even if a supplier makes a claim to the contrary, they are never as technical or proficient with the tool as the buyer and the best way to not only get a supplier to use a tool, but to minimize the supplier management and support time required as well, is to make that tool as easy to use as possible from the perspective of the supplier. As a result, they have completely redesigned their supplier portal so that when a supplier (rep) logs in, they can quickly see their current tasks in a front-and-center task list that breaks down their task by type, their active projects by status, their most recently completed tasks and projects, and quick links to their profile, training, and scorecards. Each project has a clear and succinct timeline and status for each of their requirements, bid and award history is available for each lot, and outstanding surveys are on the main page as well.

Survey navigation is greatly improved, with the user being able to quickly jump to specific pages and see the status of each page that is her responsibility. She can also assign pages to other team members if their input is needed or they are better able to provide the information. Everything is fully indexed and searchable and it’s designed to be just as easy for a supplier to manage her bidding and survey completion projects as it is for a buyer to manage his RFX and survey creation projects.

Session Sharing

In their newest version, Iasta has implemented a screen-share technology where a user can send her colleague or superior a link through an email that they can use to enter a screen-share with the user within the Iasta application, see what the user sees, and even take over the mouse and drive if need be. The Iasta platform is providing a great, easy, way to get multiple users on the same page.


Sourcing platform for users and bosses too. Sweet.
SaaS on the cloud, always on, real-time reporting complete. L33t.
Analyze this. Auctions, Performance. Real time data.
Optimize It. Contracts, and vendor schema.
One. Two. Smart-Source Success!

 


Sourcing Smart-Source Style.
Smart-Source Style.

If You Do Not Get Sustainable Results, Blame Yourself! (Repost)

This post ran two years ago today. Two years later, the problem remains because a number of organizations still have not figured out it’s Sourcing and Procurement and follow-through. Solutions need to be end-to-end or savings leak!

Let’s Talk!

It’s deja vu all over again!

Robert Rudzki is not the only blogger and consultant to recently hear that a potential client had, just a few years ago, hired a large consulting firm to do a high-profile “strategic sourcing program” with nothing sustainable to show for it, as he indicated in his recent SCMR blog post on Deja vu all over again. I’ve heard the same sentiments echoed to me by a number of consultants at a number of small and mid-size niche and specialty services and software providers in the e-Sourcing & Supply Management space in recent months.

It would appear that a common trend last time money flowed into laggard Supply Management organizations before the recent downturn was to simply hire a Big-X consulting firm to fast track the organization to strategic sourcing success. While this is a great way to fast-track a project, and a contract, that is expected to result in significant savings, the only thing that is fast-tracked from a finance perspective is payment to the consulting firm that runs all the way to the bank! As leading Supply Management professionals know, a contract does not guarantee savings. The only way to achieve savings is to execute against the contract and make sure savings are realized. Just because you have a new contract that allows you to source widgets at $8 a pop, instead of $10 a pop, this doesn’t mean you are going to save $200,000 on your annual purchase of 100,000 widgets. For the savings to materialize, all of the following has to happen:

  • the buyer has to place the order with the contract supplier
  • within the contracted lead-time and the supplier
  • has to ship on time
  • using the approved carrier and shipping arrangement
  • and pay all required third party and government export fees
  • and file all appropriate paperwork at the same time your organization, or a 3PL acting on your behalf,
  • files all of the appropriate import and compliance paperwork
  • and pays any associated duties to make sure that
  • the product arrives at the warehouse when its supposed to
  • where it is received, inventoried, and appropriately stored which results in
  • an invoice being accepted and verified against the contracted rates and
  • paid at the appropriate time only when all goods are received and verified as acceptable.

Simply put, if

  • the order is placed with the wrong supplier
  • or placed late and the order has to be expedited
  • or shipped late and a different shipping method has to be used
  • or export documents are not filed on time
  • or fees are not paid and fines are issued
  • or import documents are not filed on time
  • or taxes are not paid and fines are issued
  • or the product is not properly inventoried or stored and can’t be found and unnecessary replacements need to be ordered
  • or the invoice is not verified and the old rate is still being charged
  • or the invoice is paid late and a penalty is applied

then those (significant) savings negotiated on your behalf go out the window. And you’re not going to get them back! First of all, once they’re gone, they’re gone. Secondly, because you weren’t actively involved in the project and didn’t insure that the knowledge that you required to achieve a sustainable transformation was transferred, you’re not going to be able to keep costs down when you renegotiate the contract in this economy where supply is tightening and costs are rising. So you’ll pay even more, even if the rate should stay almost flat.

In order to get results, you have to work with the consultants to understand the strategic sourcing process, the strategies applicable to your organization, the goals of each individual project, the savings opportunities in each project, the key contract terms, the changes that need to be made to capture the savings and adhere to each contract term, the key metrics, the measurements that need to be made regularly, and the warning signs that something is happening / has happened that could jeopardize the savings the organization expects. Failure to do any of this is a sure-fire way of making sure that nothing changes and that your organization continues to leave money on the table.

In short, if your organization continues to be one of those organizations that leaves up to 40% of the contract value on the table because you did not do all of the above, don’t blame the service provider unless you did all of the above. As Charles, Bill, and Bob said in their recent books on The Procurement Game Plan, Managing Indirect Spend, and Next Level Supply Management Excellence, success is your responsibility and you have to actively manage your service providers and make sure that the knowledge required for a sustainable transformation is transferred to you.

So put an end-to-end solution in place. And let’s Never Talk Again about this!

MarketMaker4: A Great Foundation for Successful Sourcing in the Mid-Market

Our last post in our four-part series that posed the question as to what the key ingredients to a successful e-Sourcing strategy are ended with an introduction to Market Making and MarketMaker4, one of the newest arrivals to the e-Sourcing party. However, unlike a number of vendors that sprung up during the latter half of the last decade, their solution is more than another me-too sourcing platform with modules and features almost indistinguishable from the platform that came before.

MarketMaker4’s new and distinct platform is buit around 4-key solution elements:

  1. State-of-the-Art e-Sourcing Platform,
  2. Integrated Company Intelligence,
  3. Integrated Market Insights, and
  4. Market Making.

This is because MarketMaker4 believes that all of these components are vital to a successful sourcing event, and it is not alone in this belief. Despite the fact that the solution was only launched a few years ago, MarketMaker4 already has over 75 global clients! Not bad for a new e-Sourcing start-up that was bootstrapped by its founders until it was acquired by Xchanging last year, which, realizing its significant potential, intends to keep MarketMaker4 as a standalone holding.

MarketMaker4’s modern e-Sourcing Platform is focussed on e-Negotiation support and the core functionality is e-RFx, e-Auction, and Reporting, with all of the standard features you’d expect from such a platform plus a few enhancements compared to the base platforms of the noughts. The most significant of these are the matrix-style bidding, which allow bids to be placed across three dimensions (such as lot, item, and [ship-to] location) and analyzed across different metrics (best price, best price by lot, best total price, best total price by lot, best weighted price, best weighted price by lot, etc.), and the custom weighting formulas that allow a sourcing manager to create custom rankings that can take all elements of a supplier’s bid into account — base cost, transportation, turn-around times, etc. — and all elements of a buyer’s assessment — quality, reliability, brand value, etc. — into account when calculating a total cost of ownership or bid ranking, by item, lot, or auction.

The platform is easy to use and integrates wizard-like walk-throughs for setting up new events. If a user is setting up a (reverse) auction, it walks the user through general settings, matrix design, uploading file attachments, design of the pre-event RFI, initial supplier identification, bid invite creation, and event launch. Progress indicators are included on each step (so a user knows how much is left to do), and all settings are defaulted whenever possible — allowing small events to be setup in minutes. When designing an auction, users have full control over the time and time extension rules, post negotiation override settings, minimim bid increments, ceilings and floors, bid notifications, the matrix view, displayed graphs, and the amount of competitor information displayed (and whether or not it is masked). Creation time can be streamlined by starting with one of the built in auction topics for common categories or by copying an existing event (for a similar category or the same category the last time the event was run).

The integrated company intelligence, which builds on a D&B license for detailed company intelligence through the MarketMaker4 tool (and which will soon be augmented with additional data from Lexis Nexis), allows a company to search for new suppliers in the MM4 database that could meet their category and product needs and then view detailed data that includes company data, financial data, key employees / managers, and contact information. It’s like a supplier network on steroids, as not only do you have a large list of suppliers, but you have aggregated, researched, third-party data on the suppliers, which even includes corporate citizenship ratings (for the sustainability-focussed). It’s easy to use, and allows you to do competitor searches on any company, which makes it really quick to find potential sources of alternate supply to invite to a sourcing event.

The integrated market intelligence is a combination of market intelligence (like you would get from a Mintec or Denali subscription) augmented with category briefs, a currency heat map (that lets you quickly identify the relative strengths of different currencies and trends, as historical currency data is tracked by MM4), and market indicators. The commodity indices cover North American, South American, Western European, Middle Eastern, and Asian marketplaces and more are being added this year.

And, finally, as introduced in our last post in our four-part series that posed the question as to what the key ingredients to a successful e-Sourcing strategy, Market Making is 24/5 project support from an experienced sourcing professional who is an expert in the platform, and the sourcing process it supports, and who is always a quick chat or call away. These professionals, based in North America, Europe, and Asia, are always there and always able to help you in one of the thirteen*1 (13) languages that MarketMaker4 supports.* Furthermore, since an online negotiation tool is useless if suppliers don’t use it, your suppliers also have access to full MarketMaker4 support — at no charge — in addition to bidder training sessions and monthly seminars.

MarketMaker4, which started with a belief that it’s not just what to source, but who to source from (Company Intelligence), when to source it (Market Intelligence), and how to get it right (Market Making), held on to that belief until they built a solution that realized their vision of what modern e-Sourcing should be. And it works. Their customers’ average savings is north of 10%, even without decision optimization (which demonstrates the power of integrated and properly applied market insight) and their average number of e-Sourcing projects is more than three times what it was before their acquisition of MarketMaker4). MarketMaker4 is another great option in what was becoming a dwindling e-Sourcing marketplace with all of the recent solution provider acquisitions.

*1 MarketMaker4 currently supports English, Mandarin, Portuguese, Spanish, French, German, Japanese, Vietnamese, Italian, Polish, Russian, Turkish, and Korean. In addition, because the platform is a modern platform that supports the full Unicode character set, new languages can be added quickly.

*2 While MarketMaker is able to offer support in each of the 13 languages it supports in the product, not all languages are supported 24/5. 24/5 support is only available for English and any language specified in your solution contract.

What are the Key Ingredients to a Successful e-Sourcing Strategy? Part III Market Making

In Parts I and II we noted that that when it comes to e-Sourcing success, you need four main capabilities, or (true) success could elude you. Specifically, you need:

  1. A Process
  2. An e-Sourcing Platform
  3. Actionable Intelligence
  4. A Sourcing Sensei

The process is easy. In Parts I and II, SI outlined a generic lucky eight-step sourcing process, which is the basic underpinnings of just about every good sourcing process you are going to come across from a services, software, or solution vendor.

The platform is essentially an ubiquitous commodity these days — especially from an e-Negotiation (e-RFx, e-Auction, and e-Contract Management) perspective where you have dozens of options. (Just remember that not all spend analysis packages are equal. Some aren’t much more than pre-packaged reports and others are just visibility tools, since they allow you to see all your data, but don’t allow you to change the underlying cube and, thus, have limited analytics capabilities.)

Actionable intelligence, at least on a category basis, while not always embedded in the platform, isn’t too hard to obtain in most categories, as there are a number of vendors that package up market indices, trends, and market insight reports that can be easily consumed and applied.

However, finding a true Sourcing Sensei could be harder than finding the bronze coated needle in the industrial farmer’s haystack, and even if you manage to find that Sourcing Sensei, luring her to your organization can be a more significant challenge still. You might be forced to settle for some category-based expert consulting from your local niche sourcing specialty firm. There’s certainly nothing wrong with this approach, as this will allow you to draw from the best-of-the-best in each category and possibly save even more on some key categories than you could with an in-house Sensei who will generally only be an expert in a few categories, but this approach doesn’t necessarily help you with process implementation, and, more importantly, doesn’t help your team use the tools at their disposal to the full extent of their capability (as the category consultants are category experts, not solution experts on your platform).

In other words, you need more than a sourcing-platform and market-intelligence subscription — you need guidance on how to best use the platform and intelligence at your disposal in your (e-)sourcing projects. You need what MarketMaker4 calls Market Making.

Founded by veteran e-Sourcing professionals, formerly of e-Sourcing pioneers that include Trade Extensions, The Ops Cube, AT Kearney Management Consultants, and Archway Consulting who realized in their former roles that one of the biggest needs of an e-Sourcing team was project assistance, especially when it came to proper utilization of an e-Sourcing suite and the integration of market intelligence for category analysis and new vendor identification, they decided that a sourcing platform, even if market intelligence was built in, wasn’t enough. That’s why they built an on-demand SaaS solution platform that not only built in market intelligence and company intelligence, but 24/5 project support from an experienced sourcing professional who is an expert in the platform and who is always a quick chat or call away. (And they mean quick. Customers are guaranteed a response to a chat request by a live person in one minute, every support person has a direct line that can be requested at any time, and the user can switch from chat to phone support at any time*1 during the chat.) In addition, as these are real sourcing professionals who work for MM4 (and not a third party or outsourced call center), these support people have full access to the MM4 suite *2 and can even perform certain tasks for you if you get stuck.

MarketMaker4, which started this decade (in 2010) promises a completely next-generation e-Sourcing system, and that is what they deliver. In our next post we’ll dive deeper into the 4 distinct parts of their solution platform from which their moniker is drawn.

* Unless, of course, the support person is already on a call, in which case you’re next!
*2 MarketMaker4 is only offered as SaaS.

4 Strategic Sourcing Mistakes Businesses Should Avoid Courtesy of the Strategic Sourceror

The best way to get out of trouble is to avoid trouble in the first place. In a recent blog entry on the Strategic Sourceror on “4 strategic sourcing mistakes”, it outlined four common mistakes that a company can avoid to minimize poor spend management and operational efficiency.

Overlooking the Importance of Supplier Visibility

Having a clear understanding of supplier practices is essential in evaluating the risks and possible sources of disruption that are inherent in sourcing partnerships. Blindly entering a relationship with a supplier may result in a procurement strategy that is misaligned with business goals, and this could result in slashed profits in the future. For example, the strategy could be high quality to support the brand, but the end result could be poor quality and the resultant impact to the brand from the high defect rate could result in lost sales and slashed profits.

Failing to Emphasize Results

Because Procurement resides in the back office, it is often tempting to think of it as a service function and not a driver of productivity and profit. It’s critical to focus on real, measurable, and substantial results and communicate the message to the rest of the business. Like any business process, procurement management needs to impact the bottom line. When it does, and the message is communicated, Procurement, unlike Rodney Dangerfield, will get more respect.

Overlooking Contracts

Without written contracts with specific language, businesses won’t have adequate protection if a supplier relationship goes sour. That’s why contracts should be reviewed by a corporate lawyer before being signed. But just getting the contract right isn’t enough. It’s also important to make sure the terms are followed, rebates and discounts are collected, and contracts are renegotiated and not allowed to go evergreen.

Permitting In-House Inefficiencies

An inefficient internal procurement process can limit firms’ ability to obtain the goods and raw materials they need in a timely fashion. Be sure to install the appropriate e-commerce tools that will help a company identify potential suppliers, execute RFxs, conduct auctions, optimize awards, and strategically manage the maximum number of categories.