Pool4Tool: E-Sourcing and Beyond for Manufacturers (Part 2)

In the first post in this series looking at Pool4Tool, a European-based e-sourcing provider now expanding into the US market, I provided an overview of the company's background, architecture/technology stack and solution approach -- not to mention how they differentiate themselves from the e-sourcing pack. I'll continue this analysis today by immediately diving into some of the modular capabilities of their solution -- especially those that make Pool4Tool stand out from the crowd.

Perhaps first I'll point out that on a user level, several of Pool4Tool's capabilities might seem like overkill for a typical procurement team member focused on indirect and not exposed to complex direct -- or even indirect, actually -- categories requiring significant stakeholder input, feedback and hand holding. Yet experienced sourcing resources and functional business owners will immediately see upon demoing the Pool4Tool product how important these specific capabilities are.

Consider, for example, how Pool4Tool leverages an underlying data management framework and workflow capability to support an extremely extensible and flexible approach to managing, creating, deploying and analyzing questionnaires for supplier qualification on a commodity-by-commodity basis. Essentially, they have created an information-gathering engine that would be at home in the better supplier information management products but specifically, in this case, is tightly integrated into an overall sourcing, quality and supply chain toolset. This can allow, for example, different category leads, plant managers, etc. to determine specific strategies, knock-out questions, evaluation criteria, etc. across different spend areas, categories of parts, facilities, etc.

Perhaps this explains why Pool4Tool labels its overall capabilities as "supply base management" rather than e-sourcing (I argue that what they enable, to their benefit, is a sourcing process tied to broader supplier management). Starting with up-front supplier strategy and development and procurement market research, as they describe it, Pool4Tool then enables specific capability around sourcing and supplier selection, supplier integration (including via web-standards and EDI for such areas as product development, logistics, quality, etc.), supplier performance management (leveraging customized KPIs) and overall supplier development.

Beginning early in the sourcing process, Pool4Toool lets users define specific overall stage-gates and workflows, adding a third dimension to a traditional five or seven step sourcing process. This may include collaboration and sign-offs with different internal and external stakeholders, decision makers and project collaborators. And each individual complex workflow and process may be specific to a category, part family or other customized spend or item definition. An organization, for example, might opt to have a very specific process for soliciting input and information from another quality organization -- or to incorporate specific packaging specifications as part of a collaboration to incorporate into the sourcing process. But in all cases, procurement remains firmly in control of the workflows, information and overall process steps, allowing a level of visibility into the direct materials supply chain that the vast majority of sourcing suites do not enable (e.g., simple exchange of CAD-related information, incorporation and measurement of VMI, Kanban, container management, single and prototype orders, etc.).

This may explain why typical Pool4Tool users deploy the solution as an overall supplier, program and event management platform rather than a simple sourcing toolset for running events. Interestingly (but not surprisingly), even though Pool4Tool offers a robust reverse auction capability in its core platform, only around 10% of the actual events going through their system today take the form of a downward auction. Most customers use the toolset for more complex negotiations based around collaboration and information exchange rather than direct, real-time price competition. In contrast to other vendors, I'd say that the 10% number that Pool4Tool suggests for reverse auction usage is 2-3 times below the average of most customers using other e-sourcing tools.

Stay tuned for our final analysis of how the Pool4Tool application works in practice, including overall ability to integrate into SAP back-ends, usability, and our practical analysis of look/feel/front-and-center capabilities relative to other solutions and related commentary in our final post in this series. We'll also provide observations on how companies are using and licensing the toolset from a commercial terms perspective and how this compares with users of other e-sourcing and supplier management toolsets.

Jason Busch

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