Emptoris 7: Pushing the Sourcing Envelope

In the past few years, it's been painful to watch as all of the major vendors stagnated from an innovation perspective in sourcing. With the exception of CombineNet (which has never really sold stand alone software), you could count the number of truly innovative features and sourcing approaches embedded in recent releases from the major vendors on one hand. Sure, there have been hundreds of minor enhancements to just about every product. But there's been nothing that's been truly new or highly innovative from a pure-play software perspective.

However, it appears that Emptoris is finally pushing the sourcing envelop once again (which will hopefully spark others to do so as well from a software perspective). In Emptoris 7, there's a new set of capabilities which allow for what Emptoris is terming best value negotiation which combine the real-time competitive elements of reverse auctions with the expressiveness, flexibility and coverage of optimization. Ironically, I played a small role in pioneering this capability back at FreeMarkets in 2001 when we called it "real time optimization". At the time, I wrote a whitepaper on it -- drop me a line if you want a copy -- but as a company, we were really never really successful in getting our product past the alpha stage.

This time, however, it appears that Emptoris has been successfully able to commercialize the same concept by releasing a negotiation environment that will maximize competition through offering continuous market feedback while also embedding optimization at the core. It works by allowing a flexible total cost model that enables procurement organizations to specify both scenarios and free flow constraints -- and then providing live feedback back to suppliers based on their bids / offers. After seeing the product, I'd say Emptoris is definitely headed down the right track. However, the amount of feedback that the solution provides in the upcoming release to suppliers is limited relative to the level that Emptoris can provide in a multi-round RFX optimization environment. This is due to the time and processing constraints of a real-time auction environment. Still, it's cool stuff indeed. But the subsequent releases should prove even more interesting.

More pedestrian sourcing enhancements to Emptoris 7 include expanded multi-round negotiations which enable users to better manage round-to-round administration, award approvals, staggered awards and the optimization of residual awarding. Emptoris 7 also includes multi-currency bidding in auctions which allows suppliers to simultaneously submit bids in all major currencies. As the bidding is happening, the application provides real-time currency conversion and market feedback. In this case, unlike the real-time optimization bidding which Emptoris 7 offers, Ariba (FreeMarkets) beat Emptoris to the commercialization punch by nearly a decade, offering this capability in the late nineties with FullSource. But it's good to see Emptoris include this type of real-time multi-currency conversion which is so critical from a global sourcing perspective (especially at a time where quoting in dollars is becoming less attractive for many suppliers). As far as I know, no one else besides Emptoris and Ariba have this capability today (if I'm incorrect on this statement, I would appreciate if someone could comment).

Jason Busch

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