Category Archives: Technology

The Sourcing Maniacs 2008 Vendor Tour Part 19: Servigistics

Today’s post is a little length, so it’s been broken up into Survey, Service, and Servigistics.

Survey

Wakko	in a pie shop, somewhere outside of Boston What’s taking so long?
Dot	It’s only been twenty seconds!
Wakko	But I want my pie now!
Dot	When don’t you want pie?
Wakko	When I want baloney.
Yakko	Figures. So, Supplier Soft‘s supplier management applications, built on Salesforce were really cool.
Dot	Who knew that SRM, like CRM, had so many fundamental similarities … that both required extensive information management capabilities. So, where are we off to now?
Yakko	Are we still on the S’s? How about Saqqara?
Dot	What do they do?
Yakko	e-Procurement and Item Master Management I believe.
Dot	Anything unique on the e-Procurement Side?
Yakko	I think it’s primarily catalog and content management.
Dot	Probably worth checking them out. Where are they?
Yakko	They’re back in California.
Dot	I’m still not ready to go back yet. Who else?
Yakko	SciQuest?
Dot	Aren’t they working with Emptoris now?
Yakko	I think so. Maybe we shouldn’t bother. I’d hate to trek all the way back to North Carolina just to be shut out again.
Dot	Do you really think they’d do that?
Yakko	I don’t know. I do know that the doctor hasn’t covered them, despite the fact he thinks they’re important enough to make his Vendor Day listing, so I’m not taking that as a positive either.
Dot	Okay. So we’ll leave them until we happen to be back in the area. Who else is there that starts with S? Didn’t the doctor tell us the name of a company that starts with S that we were supposed to check out?
Yakko	I think he did! Let me check my notes. Here it is … Servigistics!
Dot	SERVIce loGISTICS? What on earth would they do?
Yakko	I haven’t a clue. Maybe we should check out the doctor‘s posts for some background. I’m getting a little tired of looking stupid … glaring at Wakko
Wakko	What I’d do now?
Yakko	ignoring Wakko According to the doctor, in his post Servigistics – Tomorrow’s Strategic Service Management Today, Servigistic’s does strategic service management, particularly in the areas of parts, pricing, and workforce management.
Dot	What’s strategic service management?
Yakko	According to his wiki-paper, it is a proactive approach to satisfying the customer in a manner that is both efficient and profitable while balancing organizational strategy, resources, commitments, and pricing. Strategic Service Management supports the integration, optimization, and management of core business processes, adds to your overall business solution, and helps to differentiate your offering from that of your competitors.”
Wakko	That’s a mouthful. What does it mean?
Yakko	Good question. Just a sec … taking out his cell-phone bip-bip-bip ring … ring
the doctor	Hello?
Yakko	Hello, Doc. We have a question. Let me put you on speaker. Yakko activates the speaker phone.
Wakko	We don’t want to look stupid.
the doctor	We’ve been over this already, Wakko. I’m not that kind of doctor. You want a plastic surgeon …
Yakko	No, no. What Wakko means to say is that we’ve decided to go see Servigistics and we don’t want to show up not knowing anything about strategic service management. We’re getting tired of looking stupid because of our ignorance.
	We skip ahead a bit here. Part 16 filled in the blanks.
the doctor	Okay. So what do you want to know?
Yakko	When you say that “strategic service management is a proactive approach to satisfying the customer in a manner that is both efficient and profitable while balancing organizational strategy, resources, commitments, and pricing”, what do you mean.
the doctor	That’s from the wiki-paper. Did you happen to read more than the first sentence?
Yakko	The first paragraph …
the doctor	If you’d learn some patience, and read the great materials that are available to you — at no cost, I might add– in full, you’d probably find that the wiki-paper answered most, if not all, of your questions.
Yakko	Well can you give us the highlights?
the doctor	I guess so. What, specifically, do you want to know?
Yakko	Can you give us the nut?
the doctor	But you already have Wakko.
Wakko	Hey!

Service

the doctor	Well, when I say that strategic service management is a proactive approach to satisfying the customer in a manner that is both efficient and profitable while balancing organizational strategy, resources, commitments, and pricing, what I am effectively saying, if you’re a procurement organization, is that services are as important to your cost management initiatives as direct and indirect goods, and that, properly managed, they are a point of savings and revenue generation, and not just a cost.
Dot	But how does that work? Services require people — who cost money, and tools — which cost money, and parts — which cost money.
the doctor	Let’s break it down.
Wakko	Break it down?
the doctor	Yes. Let me ask you this. How many people? What tools? And how many parts?
Dot	What do you mean?
the doctor	Let’s say you have 10 people, but you could provide the same level of service with only 7 if you managed them better, or, preferably, manage service for a customer base that is 40% larger with the same number of staff! Let’s say you’re using an expensive ERP-based enterprise CRM but you could get away with a SaaS solution based on open source. And let’s say that you currently stock ten 225 KVA three-phase transformers, when you only use an average of two in any given month. How much more are you spending than you need to?
Dot	A few thousand?
the doctor	Try a few hundred thousand. A good service professional, depending on what you’re servicing, costs you somewhere in the 50 to 150 K band annually; ERP-based enterprise CRM systems often cost in the millions annually when the TCO is fleshed out, while a SaaS solution will often cost less than 100K; and those transformers list for 15K a-piece, storing eight more than you need at an annualized overhead of 35% is almost equal to one person’s annual salary.
Dot	So good service management can really save you a bundle.
the doctor	And make you a bundle too. What do business customers pay for?
Dot	Goods and services.
the doctor	And what goods and services do they pay more for?
Dot	Uhmm .. the ones that provide more value?
the doctor	That’s right. And how do you provide more value?
Dot	Better products and services?
the doctor	Yes, and value-added services to be precise. Good service management will allow you to deliver a better level of service than you do now, for less than it is costing you to deliver your current service level. And customers will not only pay for that, but they’ll likely pay a little more for that if you reduce their workload.
Wakko	So strategic service management is about managing your people, parts, and technology in a way that allows you to do more with less and deliver more with less, decreasing your costs while increasing your revenues. It’s strategic sourcing, on steroids, for services.
the doctor	stunned You’ve got it, Wakko! Yakko, does that answer your question?
Yakko	I think so. Now can you tell us what Servigistics does?
the doctor	I don’t want to spoil your fun. Go find out! click

Servigistics

Yakko	So now that we know what strategic service management is, let’s see if we can piece together what Servigistics does. In his post Servigistics – Tomorrow’s Strategic Service Management Today, the doctor indicates that Servigistic’s does strategic service management, particularly in the areas of parts, pricing, and workforce management. Then, in Workforce Management: A Servigistics Approach, the doctor dives into workforce management and says it is “a software-based solution that optimally plans and dispatches field service technicians and their properly stocked vehicles to a customer’s location in a timely manner in order to deliver on their service commitments” and that it will “typically addresses demand management, workforce scheduling, workforce dispatching, and mobility solutions”. Diving in, the posts says that the Servigistics “workforce planning component forecasts workload to determine the appropriate workforce size, the scheduling engine automatically sets and adjust optimal assignments based upon available data and available rules and updates those assignments in real-time if a higher-priority service call enters the system, the web-based appointment request feature allows customers to self-schedule, and the service mobility solution not only enables workforce communication, but allows the technicians to indicate where they are in the delivery cycle”.
Dot	It sounds pretty sophisticated.
Yakko	Sure does. Let’s go talk to them.
	the maniacs travel from Boston to Atlanta, Georgia
Wakko	tap, tap, tap goes the mini-mallet Hello. Hello.
Sharp Dressed Man	a sharp dressed businessman opens the door Hello … oh no!
Wakko	looking around in a confused manner What?
Sharp Dressed Man	You!
Yakko	You know who we are?
Sharp Dressed Man	Of course I do! I read Sourcing Innovation every day. It’s the best blog out there! You usually spell Trouble with a capital T, and we’re a no-nonsense operation here!
Yakko	We’re not here for trouble!
Dot	We just want to learn more about strategic service management.
Yakko	And how it can help companies.
Dot	And what you do.
Wakko	the doctor sent us!
Sharp Dressed Man	He what?
Yakko	Well, he didn’t exactly send us. He told us if we really wanted to learn about strategic service management, and what innovative companies are doing, we should consider checking you out if we were in the area. And here we are!
Sharp Dressed Man	Yes you are. Well, the doctor‘s right in that respect … we can teach you about SSM … and if you really — really — want to learn, I’d be happy to talk to you. But you have to be good.
Dot	We’re always good!
Sharp Dressed Man	looking directly at Wakko And put away the construction tools, roman candles, mechanical gadgets, and anything else that can be used for destructive purposes. Got it?
Wakko	putting his mini-mallet away Got it.
Sharp Dressed Man	Okay. So, do you know what strategic service management is?
Wakko	It’s about managing your people, parts, and technology in a way that allows you to do more with less and deliver more with less, decreasing your costs while increasing your revenues. It’s strategic sourcing, on steroids, for services.
Sharp Dressed Man	Not bad. Do you know how we enable it?
Yakko	You provide solutions for parts, pricing, and workforce management – the cornerstones of strategic service management. Your workforce management product, in particular, is quite extensive and includes workload forecasting capabilities, a dynamic scheduling engine, and a service mobility solution that service personnel can use to stay up to date in the field.
Sharp Dressed Man	Not bad. But do you understand how these solutions provide value to our customers?
Dot	They allow you to do more calls with less people through optimal scheduling, identify the most cost-effective tools and solutions to get the job done, and optimize inventory to maximize service levels while minimizing carrying costs?
Sharp Dressed Man	Correct, but do you understand how we provide value to our customers? Do you understand why a customer wouldn’t just go out and buy a parts management solution from competitor Alpha, a best-of-breed price management engine from competitor Beta, and a workforce management solution from competitor Gamma?
Yakko	I guess not.
Sharp Dressed Man	We provide a holistic solution to strategic service management.
Wakko	I like 3-D.
Yakko	Not holographic, holistic — as in concerned with the whole and not just the parts?
Sharp Dressed Man	Correct. You see, the full value of strategic service management only materializes when you tackle the whole problem. You can have the best workforce scheduler, but if they don’t have the parts, your personnel can’t perform the service. You can have the best inventory forceasting and management solution, but if the parts aren’t available where your service personnel need them when they need them, it’s for naught. And you can have the best pricing engine in the world, but you still need to have the parts available where the people are going to buy them.
Wakko	So there’s no real value unless you look at the whole picture?
Sharp Dressed Man	Correct. And that’s what we do. Through our Command Center, we unify our parts management, workforce management, pricing management, and knowledge management solution — which makes your workforce more productive — into one cohesive platform which doesn’t “improve” one aspect of service, such as workforce management, to the detriment of another, such as parts & inventory management.
Dot	I never knew there was so much to good service management.
Sharp Dressed Man	Now you do. And with that, may I bid you good day?
Yakko	Since we’re here, we really should get an update for the doctor!
Sharp Dressed Man	If it will get rid of you … and keep you OUT of my server room … glaring at Dot and Wakko I can do that. Since we last spoke to the doctor, four big things have happened for us here at Servigistics. First of all, we’ve made a number of updates to our workfoce management solution, including a web-based portal for customers to track their service status — think Fedex package tracker on a steroid shake; we’ve enhanced automatic e-mail notifications and the command center dashboards; we’ve added dispatch capability to TomTom navigation devices, e-mail, and SMS; and, probably most significantly, leveraged grid-computing technology in computation-intensive portions of the software for dramatic improvements in scalability. Secondly, we’ve made some significant enhancements in internationalization. We now support 8 different languages, including double-byte Japanese, Mandarin, and Korean; we can add a new language in two to three weeks, and each user can see the same data in her language and custom date and currency formats. Thirdly, we’ve added some specific aerospace functionality with respect to fleet provisioning, rotable pool planning, inventory consolidation, PBH/PBL cost-based planning, RTP and de-manufacture, scheduled maintenance planning with respect to repair BOMs, and replacement forecasting for life-limited parts. Finally, in addition to netting a number of significant new global customers, we’ve also landed some very big aerospace manufacturers, carriers, and MROs Anything you need elaboration on?
Yakko	Uhmm … no?
Sharp Dressed Man	Great! Thanks for stopping by. Have a great day!

Editor’s Note: At this point, we’ll be taking a short break for the 12 days of X-Mas, but we’ll return with the final two parts of the maniacs’ road tour on December 29 and December 30.

Supply Chain Management Implementation Risk Minimization

As both an enterprise software expert and a supply chain technology expert, it’s a safe bet that the recent article in i2’s Supply Chain Leader on “Minimizing Risk During SCM Implementations” would get my attention. The reality is that a poorly executed supply chain management implementation across an enterprise can destroy your business. The 2.25 Billion Inventory write-down that Cisco had to take in 2001, due to a breakdown in its supply chain forecasting and visibility systems, might have been bad, but Foxmeyer, who in 1996 was the 2^nd largest wholesale drug distributor in the US with annual sales over 5 Billion went out of business thanks to an ambitious IT revamp, that included a massive enterprise wide ERP upgrade to manage and automate its supply chain and distribution. It sold in a bankruptcy fire sale to a larger rival for a mere 80 Million.

As the article notes, while innovative SCM processes and technology tools have the strength and capability to revolutionize an organization, they can also disrupt business as usual, at least in the short term. And if not handled properly, SCM implementations can disrupt processes and technology in the long term as well … and even affect the viability of your business! They have to be intelligently managed, and risks have to be identified, mitigated, and monitored from the start.

As the article notes, the project team can’t just focus solely on achieving the deliverables when they are planning a new SCM implementation. They have to consider the risks that may arise during post-implementation, when the solution will be subjected to multiple process and technology changes that it will need to support, and possibly risk business viability. As the article points out, broader issues such as long-term performance and scalability, operating environment and hardware, and reporting and connectivity must be considered up-front to mitigate future risks.

So what advice does it gives? It provides the following three tips:

Identify Every Risk
Collect information from multiple stakeholders and perspectives, identify any potential risks, asses them, and manage those that are likely or would have a severe impact if they occurred.
Track Critical Risks Over Time
Information on the relative priority, likelihood, and status of of any risk should be available, and up-to-date, at all times.
Ensure Ownership of Solutions and Associated Risks
Make sure that everything you implement is identified, documented, tracked, and maintained. No under-the-radar implementations without proper documentation and knowledge transfer. Otherwise, the next system update will be a total disaster when multiple systems that people depended on to their job, that no one in IT or upper management knew about, just disappear.

Not bad advice, but it only scratches the surface, doesn’t give you anything you can really use to start (or track your efforts), and, most importantly, doesn’t give you the best advice of all:

Bring in an Independent Expert
Don’t trust yourself, or your vendor, to do it right. Let’s be honest … you’re not an expert in enterprise software, implementation, and integration and your vendor is not an expert in your business. You might use the same vocabulary, but, fundamentally, you don’t speak the same language (or at least not fluently). Bring in an independent third party who is an expert in both supply chain software and IT project management and in supply chain processes, and supply chain process reengineering, to manage the planning phase to insure you don’t miss any key risks, that you select the right systems, and that the implementation doesn’t disable functions or miss modules that you really do need for a subset of your staff to do their jobs. The right plan will go further to mitigating risk than any mitigation effort ever will. I guess what I’m saying is, if you don’t know where to start, don’t be afraid to call the doctor, because, nothing beats preventative medicine.

Just remember, Consultants are Cheap and it’s easy to get Maximum Value from Your Consultants.

Logistics Providers Are Not Created Equal

World Trade Magazine recently ran an article on “customized solutions” offered by logistics providers and 3PLs where it asked thirteen different experts how they would meet the logistics needs described in a ‘hypothetical case study’ for a leading developer or electronics. I think that this is one of the most interesting articles that World Trade Magazine has ever published because it clearly shows that even though a group of logistics providers might offer the same services, they might approach the solution in completely different ways and you likely won’t know who the best logistics provider is for you until you find out how they will handle your transportation needs.

A brief description of the hypothetical situation is as follows. The electronics developer jumped on the LCCS bandwagon and moved the majority of its manufacturing operations offshore. It established relationships with two major contract manufacturers and a major international logistics provider to ship product from factories in China and Hungary to distribution centers in Singapore, the Netherlands, and Memphis. The logistics provider was selected based upon freight rates and the promise of product visibility during shipment, which has been slow to materialize, forcing the electronics developer to make decisions based on the expected transit time, rather than a firm delivery date (as the provider is routinely off by as much as two weeks). In addition, invoicing is poor. Although they get the total bill weekly, details about each shipment are missing and they can’t allocate costs to a specific product. Finally, although the logistics provider is living up to negotiate freight rates, the electronics developer is constantly getting hit with handling fees that weren’t in the initial contract, as well as higher taxes and duties that may not be justified. How should the company proceed?

Expert number one, who noted that visibility is important, that a minimal level of connectivity is required between each node in the chain, and that predictive monitoring needs to be put in place, had the following advice:

conduct a full review of existing contract provisions and identify gaps between promises and realizations,
convene a summit meeting with the 3PL senior executives to discuss the gaps and develop a plan to address them, and
if the 3PL cannot realize its commitments, find a replacement logistics carrier.

Expert number two, who noted that the electronics developer probably didn’t understand the concept of total delivered cost, needs to go back to the table and focus on measurable goals that will be committed to by all parties and then develop contingency plans if the current relationships fall through.

Expert number three, who noted that the electronics developer is probably not agile enough, pointed out that they need a services oriented supply chain based on a SOA (services oriented architecture).

Expert number four, who believed that the electronics developer underestimated the importance of due diligence when selecting a logistics partner, said that the developer has to work with the carrier to first and foremost satisfy customer needs, which will require better visibility and firm delivery dates. In addition, they should get tax help to reclaim likely overpayments if their taxes increased without any clear reason why.

Expert number five, who noted that the electronics developer is no longer master of its own destiny, advises the developer to “staple itself to an order” and map its entire order-to-cash process to obtain a detailed understanding of the physical, financial, and information flows. Then it needs to work strategically with its key vendors to resolve the issues.

And so on.

The key thing to note is that, just like each expert views the problem definitely, so will each 3PL and selecting the right one will require some research to find the one that has the same understanding of your supply chain as you do.

The Sourcing Maniacs 2008 Vendor Tour Part 15: Upside

This post is a little lengthy, so it’s been broken into Flipside and Upside.

Flipside

Wakko	Why are we in Texas? I thought we were headed Northward.
Yakko	We’re not in Texas, Wakko. We’re in Alberta.
Wakko	Alberta?
Yakko	Yes, Wakko. We’ve crossed into Canada.
Wakko	But the plains. The bright sun. The cowboys.
Yakko	Are also found in Alberta, who’s biggest trading partner is Texas.
Wakko	So that’s why everybody’s oot and aboot, eh? Will we get to meet Bob and Doug MacKenzie?
Yakko	They’re not real Wakko.
Wakko	Not real? NOT REAL? They’re my heroes!
	Editor’s note: Oh Dear!
Dot	So what are we here for?
Yakko	Upside.
Dot	What upside can we possibly find in Canada. I’m a sophisticated girl. How sophisticated is a country where most of its population still lives in igloos most of the year!
	Editor’s note: While some traditional Eskimo’s in the far, far noth still live in igloos, the vast majority of the 33 Million plus Canadians do not live in igloos. In fact, except for the fact our money is colorful like European money (only our twenties are green), and we pay more taxes (supposedly to cover our public healthcare costs and additional social programs, but you can check the news to see where it really goes), Canada is extremely similar to the US. Canada may have stayed tied to Britian longer, but the US, our largest trading partner, is Canada’s primary influence. About the only other difference is that we still follow the British parliamentary system, and we don’t get to vote for whether we want tweedle-dee or tweedle-dum as Prime Minister.
Yakko	Actually, Canada is quite sophisticated. Although it is true that the majority of e-Sourcing companies are in the US, and more recently, in the UK, there are a few players in Canada and some, like Upside, have attracted a significant user base outside of their native land. And remember, the doctor is Canadian, and currently lives in a place called Halifax, Nova Scotia, which he claims is the best place to do international business in Canada.
Dot	So what’s the upside?
Yakko	Upside Software, a specialty provider of Contract Management solutions.
Dot	So where are they?
Yakko	Edmonton.
Dot	Edmonton. Never heard of it!
Yakko	It says in the guidebook that it has the West Edmonton Mall which was, since its construction in 1981, the World’s Largest Shopping Mall until Jin Yuan, the Golden Resources Shopping Mall, opened in Beijing, China in 2004.
	Editor’s note: Only three malls are larger. The Golden Resources Shopping Mall in Beijing, the South China Mall in Dongguan, and the SM Mall of Asia in Pasay City in the Phillippines.
Dot	THE AMERICAS’ … LARGEST … MALL! AWESOME! LET’S GO!
Yakko	It also says in the guidebook that the mall contains the Galaxyland Amusement Park with the Mindbender, the world’s largest indoor high speed, triple loop roller coaster.
Wakko	AWESOME! RACE YOU!
Yakko	To Upside?
Yakko & Dot	Yes, Yes, To Upside!

Upside

Dot	Why are we stopping?
Yakko	I think we’re here.
Dot	I don’t see a Mall!
Yakko	Remember, work first, play later.
Wakko	rather solemn o.k. out comes the mini-mallet tap … tap
Spectabled Sales Guy	‘Ello, ‘ello!
Dot	What’s my upside?
Spectacled Sales Guy	Excuse me?
Yakko	I think she means to ask, is this Upside Software?
Spectacled Sales Guy	Why, yes it is.
Yakko	And what’s the upside of using Upside Software for Contract Management?
Spectacled Sales Guy	Well, that’s a rather involved question. Who are you?
Wakko	I’m Wakko.
Spectacled Sales Guy	No comment.
Spectacled Sales Guy	I’m Yakko.
Spectacled Sales Guy	Obviously.
Dot	And you can call l’il ol’ me, Dot.
Spectacled Sales Guy	Hi Dot. And where are you from?
Yakko	Well, we used to be from the valley …
Wakko	… but we got wak’d.
Spectacled Sales Guy	O …. K …. and who do you work for now?
Wakko	No one … we’re fancy free!
Spectacled Sales Guy	So why do you want to know what the upside of using Upside Software for Contract Management is? You obviously don’t have any use for it in your current predicament.
Dot	We’re trying to better understand the sourcing space.
Yakko	It seems our view is a little narrower than it should be.
Spectacled Sales Guy	But why are you here? There are obviously dozens of other companies you could talk too, some of whom may even be hiring, and most a lot closer to California than us.
Wakko	the doctor sent us.
Spectacled Sales Guy	You really are wacko. Doctors prescribe medicine …
Dot	Not a doctor, the doctor … of Sourcing Innovation.
Spectacled Sales Guy	Sourcing Innovation … hmmm … the blog?
Yakko	The one and only.
Spectacled Sales Guy	So if I answer your question, I’ll get some free publicity?
Yakko	Of course!
Spectacled Sales Guy	Well, even though we don’t really need it … we’ve been in the press a lot lately … we are, after all, one of Canada’s Best Employers … and companies … but it’s a fair exchange. So have a seat. And I’ll tell you why we’re different — and what the upside to using Upside is.
Dot	Great!
Spectacled Sales Guy	First of all, we support the full life-cycle of the contract. How familiar are you with enterprise contract management?
Yakko	Isn’t it just the centralization of all of your contracts in a centralized, searchable repository so that you can find out who you have contracts with, what they’re for, when they’re expiring, and, most importantly, how much you should be paying for a good or service?
Spectacled Sales Guy	Well, that’s where it starts, but it’s much more than that. To quote your doctor, it’s not just “managing your contracts” but “managing the information that is within the contracts and related to the contracts”. “It’s being able to not only find the contract for the part you need, but share that information with your sourcing and procurement systems for automated compliance verification of invoices. It’s about being able to not only create standard terms and conditions in your contract templates but being able to annotate them with the reasons therefore. It’s about being able to determine not only what contracts are about to expire, but what risks you are open to with respect to your current contract base with respect to liability, supply stability, and corporate social responsibility. It’s about being able to drill down from a supplier contract into relevant supplier data to determine compliance. It’s about being able to drill down from your customer contracts to your supplier performance metrics to determine on-time delivery performance. Its about being able to truly manage your operations off of your contracts.” (From Enterprise Contract Management.) And more.
Dot	More?
Spectacled Sales Guy	It’s budgeting, project management and risk management. And it’s about simultaneously meeting the needs of accounting, legal, and procurement, whose needs are quite diverse.
Dot	Really? That too?
Spectacled Sales Guy	You draft a contract for goods or services in specified quantities in specified amounts. The contract has a committed amount, which comes out of a budget that needs to be carefully tracked. And if you’re in construction, consulting, or exploration, for example, most of your contracts are project based, and need to be managed against projects. And these days, contract management is as much about risk management as it is about price and service levels. You need to identify the risks, mitigate the risks, and monitor that the identified mitigations are being implemented.
Yakko	And your tool does all that?
Spectacled Sales Guy	To the extent that a Contract Management tool can. It lets you define your budgets, which contracts, and associated line items, are billed against the budgets, and then, as invoices are entered into the system and billed against contracts, it tracks expenditures against budgets. It lets you define projects, and project components, and associate contracts, and component line items, with projects. Projects can also be identified with funding levels, required forms, and have associated alerts when budget levels are reached, actions need to be taken, or insurance or certifications need to be (re)verified. And the application allows you to establish, and track, “risk drivers”. You can define a risk event, the “risk driver” that would cause the event, the impact the event would have, and the probability that the impact would be realized. For example, for an early contract termination event, you could define a “risk driver” of no on-time delivery and an “impact” of lost dollars with 75% probability. You can then track the risks by contract, by project, and by budget and this helps to ensure that your risks, and identified mitigations, get monitored.
Dot	Wow!
Yakko	But what about basic contract management. Since your tool does so much, is it difficult to use?
Spectacled Sales Guy	Not at all! It’s a streamlined SaaS offering that supports single sign-on and customization by each client. This insures that you only have to use as much as you need, on a contract-by-contract basis. Furthermore, it’s a wizard-based tool that guides you through the process of requesting, creating, and monitoring contracts, and is thus incredibly easy to use. Contract creation is as simple as selecting a type, defining a jurisdiction, choosing an appropriate template, customizing the options, defining the duration and boundary dates, and adding a searchable description.
Dot	So you have to have a template first?
Spectacled Sales Guy	No, but we highly recommend it … because the template can be re-used again and again. And our templates aren’t static Word document templates, they’re dynamic templates where each clause can have different, auto-configured, options depending on jurisdiction, risk tolerance, duration, and value. In addition, legal can define additional alternatives for each clause for special situations that can be selected as needed. This allows contracts to be quickly and easily generated with very little customization.
Dot	But I’m comfortable with Word!
Spectacled Sales Guy	Most people are … which is why our contract creation tool is 100% Word compatible. You can export to Word for editing, and then import the updated contract at any time. But our tool is much more powerful. Not only can you create drop-down alternatives, including auto-selecting alternatives, for each clause and sub-clause, but you can also track how often an alternative clause is used, how often a clause is modified, and define notes that allow usage to be properly interpreted. Plus, you can define levels of approval and equivalents in foreign languages. This is what allows our system to automatically draft a base contract once the basic meta-data of jurisdiction, duration, risk tolerance, etc. are defined. Whereas most systems just retrieve a static template, our system retrieves a customized contract.
Yakko	So creation is powerful. What about management?
Spectacled Sales Guy	Equally as powerful. You can search by any associated piece of information; organize contracts by geography, supplier, product, project, budget; and customize the meta-data you want to track. It’s a fully functional repository.
Wakko	And all that other stuff having to do with enterprise contract management you rambled on about?
Spectacled Sales Guy	All there. There’s compliance management functionality that allows you to specify, track, and alert the affected parties to the requirements at different points in the life-cycle. There’s performance management that allows you to define and track metrics — and we can tie into external systems to automatically load the approptiate data. There’s invoice and receipt tacking, which is supported by our ability to link into ERP systems to pull transactions and status levels. There’s planned expenditure and budget tracking. There’s a powerful wizard-based form-building tool that allows just about any form you might need to support a contract or relationship to be built. E-mail functionality is built into the system, and it can track all communications by contract. All of the data can be exported in flat-file, csv/Excel, and XML, and reports can also be exported in HTM, RTF, and PDF formats. And there’s a very extensive adminitrative tool that allows just about everything to be customized. Wherever possible, we use reference tables to define data, workflow, and functionality and all of them can be customized by our customers in their implementations.
Yakko	I never knew there was so much to contract management!
Spectacled Sales Guy	Well, it really depends on the organization. A small organization might not need more than decent templating and a centralized repository, but a large multi-national enterprise has very extensive contracting needs — needs that we continually work hard to meet each and every day. And with that, I bid you good day. There’s a wide world out there that also needs my attention.
Wakko & Dot	Off to the Mall!

The Sourcing Maniacs 2008 Vendor Tour Part 14: Source One & ThomasNet

Today’s post is a little long, so I have broken it up into Prelude and Platform. If you’re short on time, you can go straight to the Platform and skip the comedy of errors.

Prelude

Wakko	MFG … it’s dynamite MFG … it’ll win the fight MFG … it’s the power load MFG … watch it explode! air guitar
	presumably to the music of AC/DC’s TNT
the doctor	Guys, if I might interrupt.
	silence … as I haven’t interrupted in a while, I think they’ve forgotten about me again
Wakko	Whaaa …
the doctor	Your story so far has been great, but I was wondering if we could jump ahead a little bit to a couple of vendors in particular.
Yakko	Why?
the doctor	Well, for starters, I think that given the current economy and financial situation of most companies, I think those that are looking to dip their feet in the e-Sourcing waters for the first time would be very interested in your visit to Source One to learn about their new ThomasNet Purchasing Tools offering, and I must admit that I’m a little impatient to hear about it myself. I’m also impatient to hear about your visit with Upside Software, one of the leaders in on-demand Contract Management, which is a very important element of good risk management these days, and one of the few Canadian companies in the space!
Dot	But we were just about to tell you about our great visit with …
the doctor	And I fully intend to let you. You can come right back to where you are now as soon as we cover these two companies. Okay?
Dot	I guess so …
the doctor	Great … take it away!
	a few seconds pass as the maniacs fast-forward their story in their minds
Dot	So where are we now?
Yakko	Still somewhere in Georgia, I believe.
Dot	No, no. Who’s next?
Wakko	Why.
Dot	Why?
Wakko	Yes, Why.
Dot	But I’m asking who’s next!
Wakko	Why is next!
Dot	I’m asking a question!
Wakko	And I told you Why!
Dot	Why?
Wakko	Yes, Why!
Dot	What?
Wakko	Not What, Why!
Yakko	Where again?
Wakko	Not Where … Why!
	The Abbott and Costello routine continues for about 10 more minutes until the maniacs get a most opportunely timed call …
Yakko	ring, ring Yakko’s Yuletide Yaks … Nature’s Lawnmowers are Your Friend!
the doctor	Hello.
Yakko	In his best Bugs Bunny impersonation, which is rather flawless: Eeeeh, What’s up, doc? Yakko activates the speakerphone.
the doctor	That’s what I was going to ask you. I was wondering where you were on your tour.
Yakko	Yesterday we just visited Servigistics.
the doctor	Good. So you’re on your way to ThomasNet next?
Wakko	Yes, Why!
the doctor	They offer a free set of purchasing tools that give smaller organizations a great way to try out e-Sourcing in a cost and risk-free manner ..
Wakko	Not They, Why!
the doctor	Who?
Dot	Yes, who?
the doctor	What?
Wakko	Not What, Why!
the doctor	I told you why. Because …
Wakko	Not Because …
Yakko	He’s been doing this for the last 15 minutes. I can’t even find out where!
Wakko	Not Where, Why!
the doctor	I think I understand now. Do you mean Why Abe?
Wakko	Yes, Why!
the doctor	I’ve got it now. Wakko, I’m not calling you Abe. I know you like to answer to that name, especially when you’re wearing your black topper hat, but I’m not. When I said “Why Abe” …
Wakko	Yes, Why!
the doctor	… I was referring to the free commerce platform, sponsored by Source One, that underlies the new ThomasNet Purchasing Tools that I asked you to check out.
Yakko	And where are they?
Wakko	Not They, Why!
the doctor	ignoring Wakko Yakko, ThomasNet Purchasing Tools are in New York. Source One is in Willow Grove, Pennsylvania.
Wakko	Transylvania?
the doctor	still ignoring Wakko You can go to whichever location is closest, but remember that you’ll want someone from Source One to give the demo, which will have to be web-based if you go to New York.
Yakko	Well, since we just finished with Servigistics, we’re still somewhere in Georgia, so I think we’ll go to Pennsylvania.
Wakko	Transylvania?
the doctor	at this point, everyone’s ignoring Wakko Great! I look forward to your report when your tour is done. click
Wakko	Why! Why!
Yakko & Dot	Shut up, Wakko!
	The manicas take off towards Willow Grove, Pennsylvania. For once, they are silent!

Platform

Yakko	I think we’re here.
Wakko	Great! out comes the mini-mallet tap – tap
Proper Gentleman	Hello. Can I help you.
Wakko	Why …
Yakko	cutting Wakko off … We’d like a demo of Why Abe, the platform that underlies ThomasNet’s new ThomasNet Purchasing Tools offering …
Dot	… and an explanation of why you decided to join up with ThomasNet.
Proper Gentleman	Well, that’s easy. ThomasNet has over 3 Million users a month who need more than just supplier information. We have a great tool, that’s free to any buyer who wants to try it, that we want to make available to the mass market. It’s a perfect match. We get our tool out there, and better prepare buyers for strategic sourcing, and ThomasNet gives it’s users a way to interact with the 600,000 plus suppliers that it tracks.
Dot	And what’s the big advantage? Can’t a buyer just use your tool, and then go to ThomasNet, D&B, CVM, or any other supplier information provider when they need more information on a supplier?
Proper Gentleman	They could. But it’s not very convenient. And, more importantly, how do you know that they know what suppliers they need information on? The power of ThomasNet is it’s extensive classification hierarchy that allows a buyer to not only find suppliers for the products that they need, but to find suppliers that they never new existed, who are sometimes just one city over. ThomasNet also just released a “preferred suppliers” capability where it will extract those suppliers that are close to you and known to be capable of supplying the products you need in the quantities you require. Buyers have found this to be extremely beneficial. Since its introduction, the average number of suppliers invited per RFx has increased, the average number of responses per RFx has increased, and the average benefit the buyers have seen using the tool has increased. And that’s the point.
Yakko	So the synergy works. But it’s just a simple CMS with primitive RFx capability, right? After all, it can’t be that good if you’re giving it away for free, considering we used to sell these platforms for six-figures a year.
Proper Gentleman	Well we think it’s pretty damn good. We eat our own dog-food and use it ourselves. And I think it all depends on your definition of good. We designed a platform that would meet the needs of most small and mid-size organizations, who can’t afford, or don’t need, expensive enterprise systems that contain hundreds of “features” they’ll never use according to the 80/20 rule. All of the core functionality you need to do the majority (80%+) of your projects, the majority (80%+) of the time. This means that it has all of your core RFx capabilities, although we do have some limitations on the number of attachments and sizes since it’s a pure SaaS application and we don’t have unlimited storage networks, your basic reverse auction capabilities, and your basic contract tracking capabilities that satisfies the needs of most small and some mid-size companies. You’re familiar with Coupa, right?
Wakko	Oompa Loompa Doom-pa-dee-do
Yakko	cutting Wakko off again Yes, we’re familiar with Coupa.
Proper Gentleman	Well, it’s like the sourcing version of the Coupa Express, the free open-source coupa platform. It’s not as extensive as the full Coupa platform, which itself is very affordably priced compared to some of the enterprise procurement platforms that run into the six figures, but if you’re just starting, or your needs are modest, it’s a great way to jump in and get most of the benefits of e-Sourcing without a hefty price tag.
Dot	So it really is a fully-functional basic e-Sourcing platform? Even though it’s free? the doctor wasn’t pulling our leg?
Proper Gentleman	Yes it is, at least at a basic level. And who are you?
Wakko	Wakko.
Yakko	Yakko.
Dot	Dot.
Yakko, Wakko, & Dot	We’re …
Proper Gentleman	in a weary tone … the Sourcing Maniacs. I’ve heard of you.
Yakko	So you’ll give us a demo?
Proper Gentleman	I take it you won’t leave until I do?
Dot	That’s right!
Proper Gentleman	ok. But you DON’T leave the conference room. OK?
Yakko, Wakko, & Dot	looking rather solemn glumly OK.
Proper Gentleman	Let’s get started. Here’s our main screen for RFX Management. It’s broken into three parts: Setup and Administration, RFX – For Buyers, and RFX – For Suppliers.
Dot	Why is RFX – For Suppliers there? It’s a buyer’s tool, right?
Proper Gentleman	Primarily, but it’s also a tool for suppliers to submit bids and other requested information.
Dot	True, but shouldn’t that be a separate tool?
Proper Gentleman	Most companies buy goods to operate and sell goods to make money, right?
Dot	Right.
Proper Gentleman	So a company operates as both a buyer of goods and a seller of goods, right?
Dot	Right. But it’s usually two different people.
Proper Gentleman	At big companies, yes. But not at small companies. Often, procurement falls under the inventory manager who is responsible for goods coming in AND goods going out. In our system, she has one login … where she can do everything she needs to do. Get it?
Dot	I got it now! The right tool does what you need it to do in a manner that is as straightforward as possible. Multiple logins or interfaces to fundamentally the same tool is just confusing.
Proper Gentleman	So may I continue?
Dot	I’m ready …
Proper Gentleman	On the set-up side, the user can set-up reviewers, block suppliers from quoting, and customize template distribution lists for current and future RFXs and Reverse Auctions. On the buy-side, a user can create a new RFX or reverse auction, bring up all active, closed, saved, or copied RFXs or auctions, and select winners. And when they are ready to issue a contract, they can click over to Contract Manager where they can define the contract meta-data and upload the contract, define reviewers, define time-based alerts that correspond to required actions or upcoming expirations, define owners, and specify the affected suppliers.
Dot	That’s it?
Proper Gentleman	Let’s say you’re a small company where the majority of your purchases are office suppliers and raw materials for the specialty gears that you make. In this situation, besides strategic negotation for key raw materials, how sophisticated is your procurement going to be the majority of the time?
Dot	Not very.
Proper Gentleman	So what else do you need?
Dot	Well, in this case, not much.
Proper Gentleman	Precisely. You have to remember that our goal is to take e-Sourcing to the masses. There are already enough tools out there for the Fortune 500 and Global 2000. What’s missing are tools for the hundreds of thousands of companies around the world that could also benefit from e-Sourcing, but who don’t have the complex requirements, or the bank account, that those tools require.
Yakko	So is it easy to use?
Proper Gentleman	The majority of users we’ve talked to say it’s the easiest sourcing and procurement tool they’ve every used. Because we don’t need complex workflows or bells and whistles, we’ve managed to streamline it to the point where it’s literally as easy as Amazon One-Click. Everything is wizard-driven and guides you through what you have to do, when you have to do it, and in the manner you need to do it. It just asks you for the basic data, and let’s you decide what else you need – allowing you to upload attachments for anything specific to the event. Let’s take the RFX creation process for example. You categorize the product or service, which allows ThomasNet to pull up supplier and preferred supplier lists that you can select from for ultimate distribution, specify RFP, specify the event duration, specify the currency and country, provide a description, optionally add line items, upload specification documents and an image, specify the listing type — public or private, invite reviewers to monitor the event, and distribute it. It’s literally a 5-minute process once you’ve written the RFP document you need to distribute. Reverse Auctions are almost as simple. The only extra information you have to specify is whether you’re using rank or lowest-bid, whether duplicate bids are allowed, whether a minimum decrement is enforced, whether auto-extend should be turned-on to prevent bid-sniping, and, if it’s supplier rank, the ranking formula. The invites go out, the suppliers log in when the auction starts, and, presto, a few minutes later you have your award.
Yakko	And contracts?
Proper Gentleman	Just as simple. Define the basic data: the title, number, version, type, product(s), amount, physical location, signature date, start date, end date, renewal terms, commited amounts, committed quanities, searchable descriptions; upload the attachments; define the alerts; set-up some reviewers; and you’re good to go.
Yakko	So it really can be that simple?
Proper Gentleman	For small and many mid-sized companies, that we assist all the time in our roles as strategic sourcing professionals at Source One, it really is. We’re not trying to compete with the Aribas, Emptoris’, and Iastas of the world … we’re just trying to provide another option for companies that don’t need the extensive e-Sourcing solutions those companies offer. And now that you know that e-Sourcing doesn’t have to be very complex or involved for the vast majority of companies out there, it’s time for you to move on. I have sourcing events to oversee. Good day. The Executive shows the maniacs the door.
Dot	So, e-Sourcing is really simple at its heart.
Yakko	And for many smaller and mid-size companies, a streamlined tool will often suffice.
Wakko	It’s wakko!
	Silence again ensues as Yakko and Dot decide there’s no reasoning with Wakko today.

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