Trade Extensions: Not Resting on Sourcing Optimization Laurels

Trade Extensions will soon celebrate its 10th year anniversary as a provider -- and one of the leaders -- of the small but growing sourcing optimization and decision support market. Along with CombineNet, they're one of only two players to focus on building a business out from this critical but niche area, rather than adding optimization as an extension to broader sourcing suites (though I could argue this is how Emptoris originally began as well, even though they deviated from this strategy as quickly as they dropped the name Avinamart). I'll be featuring an update on a number of Trade Extensions recent enhancements and overall direction -- not to mention how potential CombineNet and Trade Extensions customers should evaluate both providers against each other and the broader sourcing suite providers -- in a series of posts later this fall. But in the meantime, it's worth calling out some of the highlights from a recent announcement that gets at some of the fundamental challenges and, no pun intended, constraints of historic optimization approaches in building broader support in the enterprise.

According to the news, the firm "has unveiled a new release of its strategic sourcing software featuring 'one page' optimisation and intuitive reporting ... Optimisation scenarios are now defined from one location without the need to navigate through multiple pages and users can also analyse data using a library of standard queries ... The reporting functionality has also been improved and data can now be analysed using OLAP (Online Analytical Processing) ... Reports can also be presented graphically, facilitating clear communication throughout users' organisations." What do these improvements mean in practice? Having spent an hour walking through these enhancements in a demonstration, I'd say that in general they will make the application that much more user friendly for a broader procurement audience (e.g., 50% or more of those focused on strategic sourcing) rather than just a tiny subset of a sourcing team. But more on the details in a series of posts that will follow in the coming weeks.

In general, I'd say that Trade Extensions is helping to lead a trend along with others in the market that has the potential to make optimization a standard part of a sourcing professional's desktop -- in a similar way to how organizations already use spend analysis, eRFX, sealed bid, reverse auction and related tools today. However, I'm not yet convinced this area can stand alone, especially considering the two largest pure-play vendors have less than $20 million in combined revenue. Yet as CombineNet and Trade Extensions make their tools more accessible to a typical user by making them more intuitive, masking complexity and improving their analysis and reporting capability -- which is so critical in optimization as a component of the sourcing process -- they will help to make the case for encouraging potential customers to evaluate their toolsets as an adjunct to existing optimization capabilities from the broader eRFX and e-sourcing vendor universe including Ariba, BravoSolution, Emptoris, Iasta, Oracle and SAP.

Jason Busch

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