Vendor Analysis and Shortlist: “Strategic Sourcing” or E-Sourcing (Part 1)

My first analysis in this series of posts breaking out the areas that Gartner recently evaluated collectively in its "Strategic Sourcing" Magic Quadrant will focus on e-sourcing suites. I've divided this analysis into two parts. Today, I'll examine what I term "full-capability e-sourcing suites." In Part 2, I'll look at specialists (e.g., those providers who focus primarily on advanced negotiations or optimization) as well as alternative solutions (e.g., free or very inexpensive tools). As I'm basing these posts on my own knowledge of the market, which clearly doesn't include a full snapshot of every single provider, I would encourage others to chime in. If I miss a vendor or solution that you think is mention-worthy, by all means, post a comment. As further background on what I'm basing my shortlists on, I'm limiting my commentary to the solutions that I have seen, recommended or tried out myself.

First, let's start with the e-sourcing (non-specialist) shortlist. The vendors I always think about these days first when it comes to e-sourcing include: AECSoft, Ariba, BravoSolution, Emptoris, Global eProcure, Ketera, Iasta, Ivalua, Oracle, SAP and Zycus. Among these, for companies wanting premium capabilities in all of the e-sourcing areas -- e.g., category management, basic supplier management, RFI, RFX, auctions, optimization (at least basic) -- I would always put Ariba, BravoSolution, Emptoris and Iasta at the top of my shortlist. Each have their own strengths. For example, Ariba's broader suite integration, low price points, workflow, templates and related capabilities bring it to the top. In comparison, Iasta's intuitive design, relatively advanced optimization capabilities and overall ease of doing business (based on customer feedback) all contribute to their strengths. Emptoris and BravoSolution bring their own strengths as well, including integrated suite capabilities with strong supplier performance management, optimization and configurability. In short, you can't go wrong with any of these four providers and your ultimate decision criteria come down to what you value most.

Oracle and SAP are also worthy of consideration on any shortlist where your company's back-end financial systems are based on their technologies. Of the two, Oracle offers a more intuitive user interface (and beat SAP to market with optimization). SAP provides significant n-tier configurability and very tight integration with EBP -- even though it is built on a different architecture and code base entirely -- if you really want to create a completely customized solution without tinkering at the code level. Both can be economical as well, depending on the number of seats required and the overall licensing arrangement.

Globa eProcure, Ivalua and Zycus provide capabilities that can probably meet the needs of at least 70-80% of the market. They lack some of the more advanced capabilities of the vendors listed above, but some users prefer their overall usability and interface (in Zycus' case) and tight source-to-pay integration (Ivalua). They’re also very price competitive. AECSoft and Ketera offer extremely affordable solutions lacking a number of capabilities that the other vendors have, but should still be on your shortlist if price matters and more advanced features do not (also if you want a sourcing suite integrated into a broader spend analysis, supplier management and other modules / capabilities that each vendor offers).

As I said at the start of this series, this is my own shortlist of vendors specific to broad-based e-sourcing capability. It's by no means comprehensive (e.g., it does not include vendors / marketplaces / BPOs that resale other solutions or have customized other solutions). Nor have I disclosed much detail about how I rank and rate the specific capabilities of each (this is what I do in selection processes). Moreover, this list is definitely North American-centric. But these are the vendors I know and feel comfortable recommending (with the caveats above) if an organization wants to go straight to the developer source for their e-sourcing technology. If you have an alternative option, please voice it.

In Part 2 of this series, we’'ll examine specialist solutions like CombineNet and Trade Extensions in more detail. And finally, in Part 3, we’ll look at a handful of free -- or nearly free -- alternative e-sourcing providers to consider.

- Jason Busch

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