Category Archives: Vendor Review

Archstone Actualizes

Continuing in my effort to overview the smaller specialty service firms in the sourcing and procurement space in addition to the product companies with some of the more innovative offerings, even though I wasn’t able to connect with Archstone in their San Francisco office last month, I made a point to track Bob Derocher, partner and head of their operations and procurement practice, at my earliest opportunity.

Archstone Consulting (acquired by The Hackett Group) was founded in June 2003 by senior, experienced, consultants from the likes of A.T. Kearney, BearingPoint, Booz Allen, Cap Gemini, Deloitte and PWC who wanted to form a different kind of consulting company that focussed on high value independent advisory services from a technology-agnostic and partner-agnostic viewpoint. In less than four years, they’ve grown to 235 consultants, 7 global offices, and have served over 25 of the Fortune 100 and 65 of the Fortune 500.

Like Denali, whom I overviewed a couple of weeks ago, they primarily hire experienced sourcing professionals with deep expertise in the service areas they practice in, and deep process and category expertise in strategic procurement practices. This is to ensure that they can maintain a flat organizational structure where all of their professionals, including their most experienced principals and partners, are able to work with clients on a day-to-day basis and consistently deliver value.

What I like about Archstone is that they take a client-centric viewpoint on each project and understand that good category sourcing is a combination of strategic sourcing, cost management and control, and supplier relationship management. They don’t have a set solution for their service, like a good consulting firm they work with the client to figure out what the client really needs, and they know that one approach doesn’t fit all when it comes to getting the maximum value on a category. They’re also comfortable on a wide range of projects, anything from helping you with your one-off category project to helping you build a global strategic sourcing function from scratch. I also like the fact that, like many of the good specialty firms popping up these days, they focus on making their clients self-sufficient and continually work on knowledge transfer and change management so that when the sourcing project ends, the client will continue to succeed. And they are comfortable on small to mid-size projects that only require 3-5 consultants and 3-5 months.

For those of you looking for a specialist consultancy in sourcing and procurement, the industry segments in which they have expertise are the automotive, industrial, and high-tech manufacturing sectors; the apparel, CPG, and food and beverage industries; life sciences, pharmaceuticals, and biotech; and financial, consumer and entertainment services. They also have deep category expertise in dozens of categories, which include IT Hardware, Software, and Services, Marketing and Advertising, Overhead and Support, Retail Specific Items, Capital Expenditures, Facilities, Outside Services, and Direct Materials, and on hundreds of commodities within those categories. Furthermore, they’ve sourced over $15B to date with an average savings of 13% ( as they’ve saved over 2B ).

The Coupa Sunflower Starts to Blossom

Coupa, who just hosted their first webinar, is still heads down in their quest to make their enterprise e-Procurement application better and better by the day, and still succeeding. Now covering the full order management cycle from requisition to two-or-three way reconciliation, the only thing it doesn’t do yet, at a basic level, is payments. However, you can export your purchase orders, invoices, and goods receipts to an XML, or CSV, file and integrate into your e-Payment system that way. It even has the option to track tax codes, which will simplify you tax reclamation processes. They have begun directing mid-size organizations to their hosted e-Procurement application as well, as they build up to a rumored major announcement slated for early September.

For a product that’s been out of the gate for less than a year, it’s come a long way. With it’s built-in basic RFP capabilities, which will soon support direct supplier entry of relevant bid and product information in addition to the e-mail based interface it already supports, you have the option of starting with an RFX or a purchase order (template). When the order arrives, you can generate a goods receipt for three-way matching, and the system can be configured to automatically send the buyer a notice when an invoice is submitted if they haven’t confirmed receipt of the goods or service.

And you don’t have to take my word for it anymore – you can ask for
references from one of their clients if you feel it’s necessary. But with their low price point, you might just consider buying it to try it. Coupa has adopted the low-cost per-user model made popular by SalesForce, SuccessFactors (acquired by SAP), and others. Their ultimate goal, for larger organizations, is a price-point less than some organizations are still paying for their e-mail inboxes. Speculation on pricing from nervous e-Procurement competitors continues, but I have it on very good sources an average organization can expect per-seat pricing of slightly less than $40 per user per month (with a minimal commitment) – or not much more than the cost of hosted e-mail and calendar functions with IT support for many organizations – for a fully featured e-Procurement system.

Plus, unlike hosted behind-the-firewall solutions, you get updates and constant improvements for free. Coupa intends on releasing a series of minor updates to their solution between now and the fall, when the next major version of their enterprise platform will likely be released. What can you look for? Although an update schedule has not been finalized, since Coupa believes on implementing commonly requested feature first, you can expect streamlined payment system integration, more built-in reporting, and more pre-enabled punch-outs in the coming months. Add this to their newly completed filter-based budget reporting, enhanced approval workflows (with approval limits), tolerance-based invoice matching, multi-currency support (including the ability to integrate with the Bank of New York exchange rate web-service on a regular basis), improved survey and template creation, and extremely-fine grained roles-based security (with template support), and the solution footprint has considerably improved.

So, if you’re looking for an e-Procurement system, be sure to check it out. You might just find what you’re looking for. And when it comes to constant improvement, you can be sure they’re going to Coup-at-it

The Arena Solution

The effectiveness of your Product Lifecycle Management (PLM) solution and its ability to manage the information associated with the entire lifecycle of a product from conception, through design and manufacture, to service and disposal, can be the difference between costly inefficiency and profitable efficiency. However, the complexity and cost associated with many traditional PLM solutions often puts these solutions out of reach of most small and mid-size companies. That’s why the on-demand PLM solution from Arena deserves due consideration from any product manufacturer looking to increase their efficiency and productivity and why sourcing and procurement professionals should be familiar with it, and its benefits, since the greatest cost reductions result when sourcing is involved in product development from day one.

Arena, founded in 2000 by ex-manufacturing executives who needed an easy to use, affordable, and quick-to-implement PLM solution that could take advantage of the internet as a delivery mechanism to allow for collaboration both within and beyond their four walls, is different from traditional PLM providers in that it is easy to implement, easier to use, and accessible to all of your partners, to whatever extent you want it to be.

Whereas a typical behind-the-firewall PLM solution is often challenging even for trained power-users, as expensive as SAP (comparative speaking), and significantly complex and time-consuming to implement (with implementation and configuration cycles of six months to two years not uncommon – and sometimes only for basic functionality), small to mid-size users of Arena can often be up and running in a day, with the most complex implementation maxing out at about a month.

Arena also has all the traditional benefits of an on-demand solution – including no large up front cash outlay, economies of scale, free upgrades, rapid responsiveness, and collaboration in addition to an ultra-configurable fine-grained security model, cirriculum-based on-demand training, and multiple role support to allow you to buy just the capabilities you need for each user. This makes the application very secure as you can control, right down to the domain and IP address, who has access to what and when the information expires and ultra-deletes, very useable as a user can access just the training resources she needs when she needs them, and makes the application very affordable as a company only has to pay for full access for the users that need it.

Furthermore, Arena is a very stable company with over 300 customers from garage shop operations all the way up to entire divisions of companies like Xerox. Many of these companies use the application across departments and with suppliers and partners distributed all over the globe. And when you factor in that they do a quarterly analysis on application usage on a customer-by-customer basis to determine not only what customers are using what features but what customers are not using the capabilities they paid for, so that they can contact those customers and find out what they need to improve either in the application, the training materials, or the customer support, you know that they’re not going anywhere.

Arena is particularly suited to the mid-market that they’re focussed on. Their on-demand model allows them to offer a flexible pricing model that can support three guys in a garage all the way up to large mid-market companies and their focus on the Product Information Management (PIM) aspect of PLM allows them to offer a PLM for mere mortals solution that anyone can (learn to) use. So if your mid-market company is looking for a PLM solution, make sure that the candidate solutions are those that can also be used by sourcing professionals like you and consider pushing to have Arena added to that list. After all, when it comes to on-demand, there just aren’t that many PLM providers, and fewer still that built their solution on-demand from the ground up. In the former category, I believe there’s PTC’s Windchill solution, which is resold by IBM, and Oracle‘s hosted Agile solution (which isn’t really true SaaS), but in the latter category, and I’ll admit I’m not an expert in the PLM space, I don’t know of any other on-demand PLM solutions that were built to be on-demand SaaS from the ground up.

Nextance: Next Generation Contract Management

In our last post, we tackled the subject of Enterprise Contract (Lifecycle) Management. In this post, we are going to discuss Nextance (acquired by Versata Enterprises) – one of the more innovative players in the contract management space and one of the few players trying to tackle the breadth and depth of Enterprise Contract Management. With the recent release of their new Proposal Management Software, Nextance is extending their enterprise footprint – which is quite respectable. This module complements their contract authoring, contract management, and business management modules which provide solutions for sales, procurement, legal, and intellectual property.

Nextance, which is bound to have some cool new announcements and campaigns in the near future (since July starts their fiscal year), recognizes that there is a large gap between contracts and financial processes in many companies, and specifically between contract creation and revenue tracking, and is endeavoring to close that gap. Its contract management solution allows you to define event triggers around milestones, orders, and invoices for compliance purposes and its business management solution allows you to determine all of your contractual spend for the current or coming quarter.

That’s why Nextance is currently focussed on contract lifetime value optimization. Most companies have significant value locked up in their contracts, and without the tools to track, manage, and extract the value, it will go untapped. In order to obtain the savings you negotiated in a supplier contract, you need to make sure you’re paying the contracted rates and not a penny more. In order to keep your profit levels up, you need to insure that your customers are paying you at contracted rates, and not at an unauthorized discount. In order to maximize the value of your IP, you need to be able to keep on top of the IP assets you have and effectively market and license the technology.

However, the greatest benefit a well-defined and well-managed contract can provide is risk mitigation. If you’re competing in an open marketplace, you can usually get a good price – especially if your supplier knows you can switch (or you threaten to). If supply exceeds demand, you don’t have to worry about supply availability. If you have a relationship built on trust and collaboration, chances are you’ll never need to refer back to the contract to settle a debate. But if you’re in a closed marketplace, if demand exceeds supply, or if there is the potential for distrust on either end of the relationship, then risk becomes an issue – and the way to prevent against it is to mitigate those risks up front in a contract.

And now that Nextance tackles pretty much every major business function except HR, and handles the contract process from the proposal stage all they way through to active compliance management, they are in a prime position to start tackling contract-based risk management. And when you factor in their strong XML foundations, Microsoft Word integration, advanced search, and strong reporting capability, it becomes a solid foundation for building contracts that tackle risk and determining whether or not your current contracts leave you exposed to newly identified risks.

And considering that most of Nextance’s implementations are large deployments throughout multiple departments, if not the entire enterprise, on a national, international, or global scale with thousands of users, and in some cases hundreds of thousands and users, you know they can support the scalability needed to capture all of the information needed to make risk mining a possibility. There are very few other companies that can claim the size and breadth of the deployments they have and it should be interesting to see how they fare against the other niche best-of-breed vendors, such as the Emptoris (acquired by IBM, sunset in 2017) Dicarta solution, iMany (acquired by LLR Partners), and Upside Software (acquired by SciQuest, rebranded Jaggaer). I think that they’ll definitely be a very interesting company to watch this year and I am a little anxious to see what they announce first.

Catching up with Ketera

During my recent trip to the San Francisco Bay Area, I had a chance to catch up with Ketera (acquired by Deem), who have been working hard on improving not only their next generation spend analysis solution and on integrating their solution with Hyperion, as discussed in my March post, but on improving their catalog management, contract management, and invoice management integration, their reporting capabilities, and their supplier enablement solution.

Although they have one of the larger supplier networks, with over 115,000 users, it was a breath of fresh air to find out that Ketera understands that a supplier network in itself has no inherent value and that the real value is in supplier enablement. After all, if you’re a fortune 3000 company that’s been in business for tens or hundreds of years, you know who your suppliers are and who their competitors are and the supplier discovery mechanisms touted by supplier network providers really aren’t all that valuable to you. The value of a supplier network is the ability to electronically communicate with your suppliers, automatically send and receive purchase orders, goods receipts, invoices, and payments, and enable your suppliers to new levels of integration and productivity. Thus, the maximum value is obtained when all of your key and large-volume suppliers are connected to the network, and this requires a solution that is standards based, open standards browser compliant, easy to use and adopt, and capable of supporting the information that both you and your suppliers need.

To this end, Ketera is working on improving its supplier on-loading processes and solutions, adding interfaces to common back-end systems used by its customers (to complement its newly acquired SAP Netweaver Certification), and streamlining it’s document exchange protocols, mechanisms, and management tools. Ketera is also working on extending it’s catalog capabilities and punch out support and integrating price cross-checking with its contract management solution to improve compliance across-the-board.

Although I don’t expect any new releases or major announcements from Ketera until the fall, they’re certainly a company to keep an eye on. Not only are they one of the few companies in the space to offer integrated sourcing and procurement solutions on-demand, but one of the few companies that understand the benefits of helping their customers with whatever solutions they need and playing nice. For example, although they offer best-of-breed spend analysis, RFX*, and contract management solutions, their event management solution is weak and they don’t offer modern reverse auctions or decision optimization and they recognize that some customers will need these solutions. To this end, they partner (and re-sell) Iasta‘s solution to insure that customers that need the full range of eSourcing tools have them at their disposal. Combined with their fairly extensive e-Procurement offerings (which, from a basic cycle perspective, is only missing direct integration with leading payment providers and tax reclamation software integration), this provides users with one of the most extensive solutions in the marketplace from an integrated end-to-end e-Sourcing and e-Procurement cycle perspective.

Furthermore, I expect that before the end of the year, they’ll reach a point where they could start working on some very advanced and very interesting predictive cost baselining and modeling solutions that can only be built once integration is achieved to the point where holistic analytics become a possibility. This would allow companies that don’t have the extensive data required by Akoya (acquired by I-Cubed) or the physical process planning knowledge required by Apriori to tackle cost modeling and cost estimation in a way that they are unable to today. In other words, there’s still room for lots of innovation in the space, and Ketera is one of the few companies that I’ve talked to that might really break it open in the next few years by introducing new capabilities that can be used by the masses.

* Please read the comments! This was a typo. When their RFX capabilities are augmented with Iasta’s through their partnership reselling agreement, they compete with best-of-breed RFX solutions but, as Jason Busch points out, they do not on their own. My apologies.