Yesterday I posted a short blog entry that offered up some initial thoughts on CombineNet's new OnCall software offering. In it, I suggested that "my initial take is that both OnCall solutions will be a good fit for companies of above-average sourcing sophistication who are confident in taking greater ownership of highly complex sourcing events and have enough truckload and ocean freight spend to justify the investment above and beyond their current sourcing platforms." In this post, I'd like to expand on some of my initial thoughts on the subject while providing additional commentary on what this new solution -- and what those like it -- will mean for the overall Spend Management market.
To begin, for those who are not experienced with CombineNet, the provider has long been known as the premier "price-no-object" provider of advanced optimization-based approaches for complicated transportation bids. Emptoris, Bravo, Ariba, Iasta and others might try to knit pick me with this statement, but I'd challenge them and others to show me a pattern of wins against CombineNet in the transportation arena where price was not a dominant factor (and where CombineNet was invited to the table). Historically, CombineNet's strength in transportation spend has been both flexibility and speed. The way companies have used CombineNet in the past to create scenario rules, attribute these rules (e.g., by item list, SKU or organization) is above and beyond the capabilities of other sourcing optimizations solutions that I have seen in the market.
For example, using CombineNet, companies can run rapid iterative scenarios with 30-50 custom rules (versus just a handful). Powerful stuff. But unfortunately in the past, CombineNet offered too complicated a solution to unleash on the general Spend Management public in a stand-alone software offering. In other words, these capabilities required that you also work with CombineNet to either configure or customize a specific deployment.
Traditionally, these complicated bidding events required a number of weeks (or months) of professional services time to configure (or in the most advanced cases, over a month of custom coding). But with OnCall, CombineNet has taken many of the best practices they've learned from all of the years of services-driven engagements and hard-coded these into their new offering. And from a pricing standpoint, it shows. Whereas a typical domestic truckload event using CombineNet in the past might have cost a company 10 basis points of their spend (or $125-$250K on average), the new solution is available at $65-$75K per event. Companies can also layer CombineNet services on top of the basic software costs in such areas as event management, supplier/data on-boarding, etc.
What's my final take? I'd like to both talk to customers before making a definitive judgment call and try out the solution myself, but from what I know about CombineNet's technology and approach relative to its competitors, I'd say that this software-driven approach will provide what amounts to more cost effective decision guidance in highly complicated and large transportation categories. I also suspect that we'll see advanced users of other sourcing platforms give CombineNet OnCall a chance to prove itself as a complement to their existing investments.