Category Archives: Technology

Good SaaS vs. Bad SaaS

A recent post over on Richard Anson’s blog on “11 Crucial Tactics for SaaS Pricing”, while written for new SaaS vendors who need to know how to price their solutions, did a great job of helping to point out some of the key elements of a good SaaS solution sales process vs. a bad SaaS solution sales process as well as some key elements of a good SaaS solution from a customer’s perspective vs. a bad SaaS solution from a customer’s perspective.

In particular, it focusses in on some of the key non-functional characteristics that should be examined in your SaaS purchase process. These non-functional characteristics can easily be summarized in a quick side-by-side comparison of good SaaS vs. bad SaaS.

 

Good SaaS Bad SaaS
Value-based Cost-based
ROI-justification Process Improvement
Business Case Justification Potential Manpower Reduction
Priced According to Company Size and Utilization One Price Fits All
Competitively Priced Priced Out of the Ballpark

 

In other words, if the SaaS solution is good, it will be competitively priced, and priced according to your company size and intended utilization, come with a business case justification, deliver a proven ROI, and clearly deliver ongoing value.

And if a SaaS solution is bad (for you), it will be priced out of the ball-park with respect to its competition (and be either too expensive to deliver value or too cheap for the company to sustain over the long term, which will lead either to the provider’s failure or substantial price increases at contract renewal time), have little in the way of a solid business case justification, or have a poor ROI over the short and/or long term. SaaS is more than features, functionality, hands-off management, and a cool web experience — it’s about delivering value to your bottom line.

For insights on how to cost out the TCO of a SaaS solution, and compare that TCO to an installed solution, see SI’s classic post on Uncovering the True Cost of On-Premise Sourcing & Procurement Software. For insights on what constitutes a good SaaS contract, see SI’s classic posts on SaaS Contractual Considerations (Part I and Part II). And remember, as per SI’s recent post on Maximizing ROI from Technology, it doesn’t matter how strategic the IT Vendor is, it only matters how strategic the solution they offer is.

Intengo – Mastering the e-Procurement Tango in Turkey

When we last covered Intengo back in 2010, they were doing the e-Sourcing Tango in Turkey. At that time, they provided an on-demand e-Negotiation platform built around (multi-round) e-RFX and e-Auction with a sprinkling of Supplier Information Management (SIM) and early stage catalog management thrown in. A project-oriented system, it was a breeze to set up a new RFX or e-Auction event in the system and get a new sourcing event going. One of the unique features of the platform was the calendar view, which integrated with Microsoft Outlook and hot-linked to all of the relevant screens in the relevant projects, and which allowed a buyer to get a quick summary of where they were and what they needed to do at any given time. Other cool features were item-level currency support, smart unit support, and bulk-updates on (filtered) lots or items.

Since then they have been dancing up a storm and they are now the leading e-Sourcing and e-Procurement provider in Turkey, with over 100 clients, including a few notable international clients with operations throughout Europe and Asia. That’s right, they have migrated from a basic e-Sourcing application to an end-to-end e-Procurement solution in an effort to serve their clients better. Since 2010, they have added requisition and purchase order support, price lists and full catalog support, delivery notification and tracking, and integration with the big ERPs (Oracle and SAP) for master data management, invoice management, and e-Payment / Accounts Payable integration. In addition, they have also integrated budget management into the e-Procurement process.

A user can begin a requisition from a catalog or from a free-form request. The request can be sent straight to a (preferred) supplier if it is within the user’s spending limit (as defined by the budget), turned into a Purchase Order (after being approved, if necessary), or turned into an RFX or e-Auction. If the request is turned into an RFX or e-Auction sourcing event, the RFX or Auction is pre-populated with pricing from the most recent supplier price list (at the volume level) or catalog if pricing is available. If the request is sent straight to the supplier, the supplier can accept the request and provide delivery information, reject the request, or decline due to incorrect or insufficient information. In the last case, the buyer is notified and corrections can be made. In the case of an RFX, after the event has been configured, the request is sent to the selected suppliers who can bid on the whole or part, decline to bid on the whole or part, or decline to bid because of incorrect or incomplete specifications on one or more line items. In the last case, the buyer is notified, and if the buyer agrees, he can suspend the RFX or e-Auction until corrections are made, and all suppliers are immediately notified of the event suspension. A supplier who accepts a purchase order, who is awarded an RFX, or who wins an auction is able to immediately enter delivery information into the system (which can generate e-invoice data for submission to the organization’s ERP) and when the product is received, a buyer can mark the product as received in the mini delivery module.

The catalog functionality is pretty much what you would expect and is comparable to most other e-Procurement platforms out there and the budget capability can be used to define budgets by user, project, and department and track them against requisitions and awards project-to-date and year-to-date. The built-in reporting is good, and Intengo even has canned reports by brands (which are great for retailers). Furthermore, Intengo can create and customize any report on any platform data that you want, but note that the platform is still missing a custom report builder. However, realizing this weakness, Intengo gives you the ability to export any and all data to Excel or to your ERP (so you can build your own reports using reporting tools you already have). So if you do full ERP integration (and use it for your Master Data), and you already have a best-of-breed reporting product sitting on top of that (and chances are you do), you can use that to build custom reports on your sourcing and procurement projects.

They have also made enhancements to their e-Sourcing platform. One of the most significant enhancements is their formulaic auction capability. This weighted auction capability allows a user to define an arbitrary weighting, composed of one or more factors, to every bid, on a lot and line-item level, that is used in determining the rankings. The user can define one-or-more weighting factors based upon quality, warranty, shipping, associated duties, etc. The categories can be (optionally) displayed to the suppliers who can choose the ones relevant to their bids (such as shipping, warranty included, etc.) and the weighting factors can then be applied behind the scene. In addition, during an auction, suppliers can also suggest substitutions for each line-item and lot, which a buyer can accept. (And, if necessary, the buyer can pause the auction, define appropriate formulae, and provide additional information to other suppliers who might also be capable of offering substitutions on different terms.)

Intengo is definitely an up-and-coming contender on the end-to-end Procurement scene in the European mid-market and another European e-Procurement provider to watch, especially since, like other European players, they have been internationalized and multi-language since day one on their integrated, single-solution, SaaS platform that allows them to create new instances virtually on-demand. While SI doesn’t expect them to cross the Atlantic for another couple of years, it does expect that the North America companies competing across the pond are going to be seeing a lot more of them on mainland Europe in the coming years.

Insufficient Sleep is a Public Health Epidemic – Don’t Let Your Supply Chain Give You Insomnia!

As per this feature on the Centers for Disease Control and Prevention website, insufficient sleep is a public health epidemic, which shouldn’t be surprising given that over one third of the US adult population gets less than 7 hours of sleep a night, when the average adult needs 7 to 9 hours a night. (Source: National Sleep Foundation)

Why? There’s a plethora of reasons. Overwork. Stress. Late Night Talk Show Addictions. Facebook and Twitter Addictions. And Insomnia. However, Supply Chain Insomnia should not be a reason.

According to this ridiculous article (on causes of supply chain insomnia identified) over on Supply Chain Digital, the following 10 issues are keeping supply chain leaders up at night and giving them insomnia:

  1. Collaboration
  2. Inventory Management and Planning
  3. Demand Management and Forecasting
  4. Supply Chain Network Optimization
  5. Supply Chain Risk Management
  6. Training and Development
  7. Sales and Operations Planning
  8. Material Purchase Price Reductions
  9. Performance improvements in warehouses and RDC’s
  10. Supply Chain Segmentation

There’s no excuse for any of these issues to be keeping you up at night. There have existed great Best-of-Breed technology solutions that have enabled an organization to solve the following issues for years, many of which have been profiled on this blog:

  • Collaboration
  • Inventory Management and Planning
  • Demand Management and Forecasting
  • Supply Chain Network Optimization
  • Sales and Operations Planning

The following can be appropriately addressed with the right mix of talent, process transition, and technology:

  • Supply Chain Risk Management
  • Performance improvements in warehouses and RDC’s
  • Supply Chain Segmentation

And the following is easily solved by actually putting money back into the training budget and letting your people go on courses, instead of taking money out of the training budget to increase CXO pay while working your talent half to death:

  • Training and Development

Which leaves only one issue to worry about:

  • Material purchase price reductions

But when you get right down to it, we’re in inflationary times and everyone knows it. Prices are going to go up and people are going to grudgingly pay reasonable, minimal, price increases. So the issue is not price reductions, but cost containment, and this is easily accomplished with

  • market intelligence and an understanding of what the real price currently is,
  • process improvement that takes price out of raw material acquisition, product production, and logistics, and
  • creative re-design that reduces the need for costly raw materials and production processes.

And all of this can be accomplished if you have the right talent with the right training. So invest in your talent*, give them the right technological tools, and let them transition your processes to where they need to be. Then you won’t have to worry about any of these problems.

*It’s not like the 95% investment in the top 1% has done any good! (Source: UC Berkeley Study)

Supply Chain 2020 – What Will It Take to Get There?

I’ve been noticing an uptick in Supply Chain 2020 discussion and blogging lately, despite the fact that 2020 is only 7 years away. Why do I say only? While 2020 may be 28 years away in ‘Net Time, given the pace at which the average Supply Management Organization moves, that’s breakneck speed! (It shouldn’t be, but it is. That’s why, despite the fact that it’s 2013 and e-Invoicing is old enough to drink, approximately 90% of invoices are still paper-based.) Furthermore, most prognosticators want to make predictions that are far enough away that either their prediction will almost guaranteed to be a reality by that time or everyone will have forgotten completely about their prediction by then. (Given the rate of increase in ADD/ADHD in recent years, that might be long enough for all of us to have forgotten everything from today, but I’d like to think that some of us may still have a long-term focus, and a longer-term memory, in 2020.)

A lot of these discussions are focussing on what the Supply Chain is going to look like in 2020, what technologies are going to drive it, and how the Supply Chain is going to run. These discussions are interesting, because we all want to know what tomorrow is going to look like today, but it’s not 2020 — it’s 2013. And whatever vision you have of 2020 is not going to become a reality without a plan to get there. That plan will, of course, depend on your vision and your end goal, but regardless of the plan you choose, there are three elements that will be required to get there.

What are these three elements? The Three Ts of Strategic Supply Management, of course!

  1. Talent
  2. Technology
  3. Transition

No innovation, or renovation, will succeed without these 3T’s, and an alignment thereof.

Despite the need for transportation, Supply Chains don’t run on trucks and trains — they run on Talent. Talented people identify potential suppliers. Talented people run strategic sourcing events. Talented people negotiate and execute contracts. Talented people collaborate with supplier personnel to ensure quality, on-time delivery, and quick issue resolution. Talented people deliver to Sales and Marketing what the consumers want.

And what do these talented people use to accomplish their tasks? Technology. Real-time communication with suppliers around the globe requires modern technology. Value-generating strategic sourcing events require good strategic sourcing technology. Contract generation, management, and supplier performance management requires good collaboration technology. And the list of technological needs goes on.

However, the technology that is required, for most organizations, is not the technology that the organization currently has. In order to acquire and implement this technology, the organization will have to transition appropriately. This will involve mapping current processes, mapping desired processes, identifying technologies that can appropriately support the desired processes, and putting together a transition plan, that takes into account the needs (but not necessarily the wants) of all of the stakeholders and that is supported by the appropriate executive(s) in the C-Suite, that will get the organization there.

So if you want to get to 2020 in style, first get to 2014 in-style and focus on the 3Ts. This is one best-practice that is year-independent.

While You Were on Summer Vacation, Vendor Posts, Part II

While you were on summer vacation, SI was powering away with daily posts and continuing to cover some of the leading vendors in the space, presenting a number of deep dives on their technology platforms. Here is a short recap of some of the coverage you might have missed!

Trade Extensions

In our post on Trade Extensions (TE), where we noted that there is still no rest for the wickedly powerful, we told you that their coders never sleep (or at least not very often) and that, since SI’s last coverage in 2011, they have added more powerful fact sheets, enhanced browser-based reporting and visualization, and a formula analyzer – that pacts a much bigger punch than you’d expect. It’s often the case that a user has no clue why one model solves in a second and an almost identically sized similar model is still being processed an hour later. This is because the more complex the models get, the harder it is to pin down why they aren’t quite doing what they are supposed to be doing. The TE formula analyzer allows a user to analyze a formula and see how it is defined, how long it is taking to calculate with respect to the other formulas in the model, and what is affected by the formulas or changes to the formula. In addition, if they exist, it can suggest formula modifications that would allow the model to solve faster. However, just knowing where the problem lies is a great help if a model is solving slow.

Coupa

In our post about how it’s 24/7 for Robbie and the Coupa Factory, Part III, we noted that Coupa had completed Release 9, were on their way to finishing Release 10 (now available) by the end of the quarter, and had just released a new e-Sourcing module, which made them one of the first providers to offer an integrated end-to-end e-Sourcing and e-Procurement solution. Their new sourcing offering, which is e-Sourcing 1.0 with RFPs, RFQs, RFIs, basic reverse auctions, and basic project management and not much more than you’d find in any basic e-Sourcing suite, is still enough for an average mid-market company and impressive in that it’s as easy to use as the rest of the platform. It’s a quick way for a company using Coupa that does not have a sourcing solution to transition from Procurement to Sourcing. Plus, when you add the new expense management capabilities and catalog functionality, it’s a very quick way for a mid-market organization behind the sourcing and procurement curve to get closer to where they need to be quickly.

Kinaxis

In our posts about Kinaxis and their new paradigm for real-time end-to-end supply chain management (Part I, Part II, and Part III), we described how this extremely unique Supply Management vendor offers a single platform to take your Supply Management Operations to the next level once you have implemented e-Procurement and put your spend under management, optimized your strategic sourcing, mastered e-Transportation and Trade Management, achieved e-Visibility to manage your risk, and optimized your network design. This platform, which is successfully used by product, risk, and change managers in Supply Management to manage demand, do S&OP, undertake supply & capacity planning, do production benchmarking and scheduling, manage inventory, handle new product introduction (NPI), perform order analysis and planning, manage supply, improve profitability, and collaborate with suppliers, among other things, is designed to allow supply management professionals to get answers to strategic planning questions like the following in real time:

  • what is the impact of a supplier shutdown due to a fire in the plant?
  • how can I launch a new product a quarter early?
  • what if a user mistakenly changes an inventory parameter?
  • what would happen to our ability to fulfill demand to our other customers if we accelerate fulfilment of an emergency order for a preferred customer?
  • how can we effectively reengineer our planning processes

The Kinaxis solution supports very complex, but easily generated, what-if scenarios that will allow a user to ask these questions and get an answer in a few hours, as compared to the days, or weeks, it would have taken them in the past.

Come back Monday and we’ll tell you about three more recently covered companies you might have missed!