CombineNet Rights the Sourcing Ship: Full Software/SaaS Steam Ahead! (Part 2)

In the first post in this series, I provided a general update on CombineNet, an advanced sourcing vendor that has made the transition from focusing on leading with technology enabled solutions to now driving into accounts with software -- SaaS, to be specific -- as a primary wedge for organizations not requiring a consultative partner. In this post and one later this week, we'll share some of the highlights from CombineNet's latest software release, ASAP 4.5. Included at the end of this post are additional screenshots that potential users of the tool should find useful as a reference in catching a glimpse at what separates out ASAP from more traditional e-sourcing tools. But candidly, screen grabs don't do ASAP 4.5 justice, as it's the simplification of complexity that lurks below the surface, some examples of which you'll read about in a moment.

Perhaps the most important enhancement in ASAP 4.5 is the ability to provide what CombineNet is terming enhanced "expressive feedback" to suppliers (editors note: "expressive feedback" is a clever take on "expressive bidding," a term CombineNet originally termed). We recently looked at ASAP 4.5 and saw for ourselves two of feedback mechanisms that CombineNet has focused on in this regard. The first area, bidder feedback, is designed to drive further competition in events where companies leverage optimization versus auctions or multi-attribute auctions despite wanting to let the invisible hand still do its work. For Spend Matters, it's refreshing to see the notion of driving market competition through competitive feedback because in most optimization approaches, companies trade off expressive offers for those based only in part on market input and supplier-submitted blind clearing prices (that is, unless they leverage optimization only post-auction, which partially defeats the purpose of expressive offers). No more.

With ASAP 4.5 it's possible to provide direct feedback to where bidders stand and to enable them to adjust their bids accordingly -- even when suppliers are submitting different and unique offers. There is significantly flexibility in configuring feedback mechanisms. For example, users can chose to always provide feedback whenever there is an update in the market (e.g., another supplier submits a bid), on a per-round basis or based on specific time frames (e.g., this particular day during a multi-day tendering process). It's also possible to configure feedback based on specific market attributes (e.g., based on the low-bid or on a more configurable formula basis which users can configure in a nifty little calculator-like wizard). A formula may include inputs like current bid prices, average historic prices, quantities, etc.

It's also possible to tailor the type of feedback a bidder receives. It's relatively simple to configure, for example, whether a bidder is in first place (or another rank) or by what percentage, for those that do not want to show rank, they're outside of the market -- an "unfavorable bid" vs. a "favorable" one. In this regard, a bid that's 10% higher than low-bid might be unfavorable for a given item, but for a supplier within a 5% range, a bid may still be favorable. Users can also opt to roll feedback up on a per supplier basis rather than a per item or per bundled offer/lot/self-lotting basis. This rolled-up feedback can also include fields beyond price -- as can other feedback formats -- including the number of items covered, percentage coverage, percentage incumbent coverage and the number of conditional offers.

This all sounds very simple. But it's absolutely not in the context of an optimization-driven sourcing environment where suppliers can take hundreds, thousands or tens of thousands of line items (or more) and create their own lots, volume discount structures and other customized offers. CombineNet has made it relatively straightforward to configure feedback mechanisms on a supplier-level through it s Supplier Notification Center interface. Again, this may sound trivial and even mundane, but the complexity behind feedback it in optimized environments is anything but simple, especially for those seeking to deliver feedback to suppliers in an automated a manner as possible.

On an aggregate level, CombineNet suggests that better feedback mechanisms to suppliers can help guide event participants towards target prices and competitive terms in a more efficient manner. For those on the sourcing side, this does not only help ensure the basics (e.g., item/lot coverage) but also the ability to enable suppliers to drive competitive responses without alienating those vendors who have sworn off ever participating in an auction. Users can also take advantage of information asymmetry in terms of what feedback they provide to specific suppliers on an aggregate supplier level, a curious subject of which the tactics in this regard warrant their own post at some point in the future.

All in all, this stuff is certainly geeky, but no doubt, for those wanting to take their sourcing efforts up a notch (or two), what CombineNet has provided in ASAP 4.5 is absolutely worth digging into at this level -- or deeper.

Stay tuned for our final post in this CombineNet update when we share additional capabilities in their 4.5 release which we think sourcing professionals will find useful.

Jason Busch

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