The E-Sourcing Category

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 4) [PRO]

spend analytics

We’ve often wondered why sourcing optimization technology is not more broadly adopted today alongside or as a replacement for traditional RFX and reverse auction approaches. One of the major reasons why procurement-led optimization efforts have not yet crossed the chasm (outside of transportation spend) is that because until recently, many solutions were challenging to use without considerable training. In addition, most of the technologies available were not effective enough “out of the box” at tackling anything but logistics sourcing opportunities or somewhat simplistic bids and constraints. And, of course, not enough procurement organizations were even aware of all of the benefits optimization can bring above and beyond standard software-driven strategic sourcing efforts.

But these hurdles are disappearing — fast. This Spend Matters PRO series is meant as a primer for both sourcing optimization solution “buyers” and solution “builders.” It provides a look at what is required to use and field a best-in-class sourcing optimization solution today from both a technology and user design capability. The three previous installments can be found here and here and here. As we conclude our analysis in Part 4, we consider the areas of constraint impact analysis, scenario generation and reporting/analytics.

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 3) [PRO]

So far in our series on sourcing optimization (see Part 1 and Part 2), we’ve covered how the intersections of specialized technology capability and user design must come together to support a best-in-class experience. Specifically, we’ve fleshed out the following areas by describing what is important to look for (or build) into a solution on both a functional and user experience perspective: constraint support, mathematical foundations, cost modeling, e-sourcing and reverse auction integration approaches, guided sourcing and automatic missing data and outlier identification. Today we turn our attention to how world-class sourcing optimization capability can address the automatic identification of unsatisfiable constraints and the tricks of the trade to fix them.

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 2) [PRO]

Sourcing optimization has played a somewhat curious side role in the history of e-sourcing technologies. Approximately half a dozen procurement vendors have offered varying degrees of capability over the years, but customer adoption, especially in the user base of vendors offering other sourcing and procurement technology suite capabilities, has remained variable, as have the capabilities of the underlying optimization solutions themselves.

As we noted in the first installment in this series, sourcing optimization is “heady, complex and requires significant mathematical, technical and domain expertise to use” — at least in the past. It’s not a common skill combination. Developing and supporting such capability has also required skilled R&D (academic), product development and product management resources, so assuming you could find the right people, adding sourcing optimization to existing sourcing products required significant investments.

This Spend Matters PRO series provides a “how-to-guide” to selecting and developing best-in-class sourcing optimization technology, inclusive of a user design and interface that can maximize adoption. We suspect it will be useful for procurement organizations, consultants, business process outsourcing (BPO) firms and third-party logistics (3PL) providers evaluating or cobbling together solutions to use internally or own behalf of customers.

But this brief should also be equally valuable for technology vendors that are looking to build capability in the area, or improve upon existing sourcing solutions. In Part 1 of this series, we explored how powerful constraint support, solid mathematical foundations and advanced cost modeling capability must come together in a solution that dovetails best-in-class functional capability with optimal user design. In this second installment, we turn our attention to e-sourcing and reverse auction integration approaches, guided sourcing “what-if” support and automatic missing/outlier data identification.

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 1) [PRO]

There’s a reason Coupa spent a healthy chunk of its IPO proceeds to purchase Trade Extensions: sourcing optimization technology is heady, complex and requires significant mathematical, technical and domain expertise to build. But more important than the barriers to entry in bringing it to market, the value sourcing optimization can bring to customers is materially greater than what standard e-sourcing and reverse auction technology can deliver. So if you’re pitching “savings” or “value” as a service for procurement, you’d be hard pressed to prioritize any other area over strategic sourcing optimization and related supply network design capabilities — even if it’s still somewhat a novelty in terms of adoption outside of logistics and transportation spend.

While we have explored and defined sourcing optimization technology in the past (including specifically what makes Trade Extensions great and why Coupa bought it from a customer perspective), we have not yet defined what the optimal (no pun intended) components and user design elements of a sourcing optimization solution look like more generically. This Spend Matters PRO series aims to do just this, breaking new ground in spelling out for procurement and supply chain professionals, consultants and technologists what they should look for (or strive to build) when considering sourcing optimization capability. It is meant as a companion to the other PRO articles in this series thus far covering what best-in-class technology and user design look like for e-sourcing (see: here and here) and reverse auction (see: here and here) technologies .

So what does best-in-class sourcing optimization look like and how does form follow function from a design perspective in supporting it? In this first installment in our series, we cover the concepts of powerful constraint support (and what’s required to support it), solid mathematical foundations and advanced cost modeling.

What To Expect from Best-in-Class Reverse Auction Technology and User Design (Part 2) [PRO]

auction

Spend Matters tracks more than 50 technology providers that claim to have some type of auction or reverse auction capability in place to support strategic sourcing efforts of procurement organizations. But only a select few vendors go the extra mile to support what we consider the core capabilities that just about any procurement organization can take advantage of to drive incremental savings and results.

As we conclude our look at what procurement organizations should expect from the intersection of best-in-class reverse auction capabilities with a streamlined user design/experience, we define and explore the following areas: asynchronous real-time interactive graphical views (of events), real-time substitution request capabilities, real-time connectivity monitoring, constraint support and optimization-backed capability. Missed Part 1? Read it here.

What To Expect from Best-in-Class Reverse Auction Technology and User Design (Part 1) [PRO]

Thus far in this Spend Matters PRO research series, we have explored how optimal user experience (UX) and advanced feature/function support have become inseparable when it comes to delivering best-of-breed e-sourcing capabilities (see What You Should Expect from Best-in-Class E-Sourcing User Experience and Functionality: Part 1 and Part 2). We pointed out, for example, that numerous specific elements must come together to drive strategic sourcing and RFX success for anything but the most basic strategic sourcing scenarios.

These capabilities that we covered include guided event creation, simplified template creation, clutter free role-based views, easy bulk file upload (and association), easy starting bid population, simplified bid validation and verification, and nuanced delegation approaches (for buyers and suppliers). When it comes to reverse auction capability and technology, however, this is just a necessary list of basic functionality for foundational support. It’s far from complete, as reverse auctions are really their own “sub-module” in their own right.

As our series continues, we explore how additional UX and technology/feature requirements come together to create best-in-class reverse auction technology. But let us first start this series with a warning: Few technology providers come close to touching all these core capabilities today. In this first installment, we define and explain the concepts of — and capability needed to support — powerful lot configuration (with formula-based pricing), extensive (reverse auction) format selection, deep parameterization capability and smart “multirepresentative” supplier views.

What You Should Expect from Best-in-Class E-Sourcing User Experience and Functionality (Part 2) [PRO]

E-sourcing technology is becoming increasingly defined by the user experience as much as the underlying functional and technical capability. But in the future — and we see this trend starting already with best-in-class capabilities — the combination of the user experience (i.e., design) and underlying technology solution components and feature/function capabilities will become increasingly intertwined and inseparable. This Spend Matters PRO series examines the intersection of what a best-in-class user experience and functionality capability means for e-sourcing solutions today and tomorrow.

In Part 1 of this series, we explored what capabilities and experience procurement organizations should expect from best-in-class guided event creation, clutter-free views and simplified template creation and management within e-sourcing solutions. In this installment, we turn our attention to how the world of best-in-class user experiences and underlying functional capability are coming together to support bulk upload/attachment association, starting bid population, bid validation and verification and procurement/supplier delegation for strategic sourcing, category management and auction/negotiation enablement. These are capabilities that buyers of these solutions should evaluate vendors on based on demonstrated capabilities, approach and planned releases, and they are capabilities that technology providers should continually strive to enhance.

What You Should Expect from Best-in-Class E-Sourcing User Experience and Functionality [PRO]

E-sourcing technologies have been around for two decades now. The authors have played various roles over the years in helping architect them, design them, configure them, select them and use them. Yet while today e-sourcing should be a mature and functionally rich technology out of the box, the reality is that there are still a number of offerings that don't have some of the most basic features you would have expected some years ago.

In contrast, other offerings continue to push the envelope in various areas of what the product can offer. In this two-part Spend Matters PRO brief, we outline what specific elements you should expect from best-in-class e-sourcing user experience and functional components. In the first installment, we cover how best-in-class solution designs feature guided event creation, clutter-free views and simplified template creation and management. As will soon become clear, it is impossible to separate a best-in-class user experience from underlying functional capability in many areas of strategic sourcing technology — the two are becoming increasingly yoked. Form following function. Or function following form. You decide!

Tell the CEO: Strategic Sourcing and Procurement’s Role in Business Success

According to a new report from Harvard Business Review Analytic Services, the role procurement and sourcing play in defending organizational cybersecurity is but one sign that the function has ceased to be simply a back-office operation. And yet, a previous HBR Analytic Services survey of 376 senior executives found that companies are not much inclined to devote advanced technological resources to non-customer-facing functions, including procurement and sourcing.

Wednesday, May 31. Downtown Chicago. Sourcing, AI and Optimization.

I rarely pimp things I'm participating in, but I'm really excited to go back to my FreeMarkets roots tomorrow (May 31) at this breakfast and morning session in Chicago on the future of strategic sourcing and e-sourcing. The event is free, and it’s open to procurement practitioners and consultants.

Keelvar is hosting the event and the topic is about the massive transformation (thanks to artificial intelligence [AI], robotics, optimization and more) starting to take shape in strategic sourcing and e-sourcing. Alan Holland (Keelvar) and Josh Brogan (A.T. Kearney) are speaking as well.

IBM Emptoris and SAP Ariba Partnership: First Take Customer Analysis [PRO]

Spend Matters provided initial coverage Wednesday of the SAP Ariba and IBM Emptoris partnership. We also offered a personal essay, a eulogy to Emptoris. This Spend Matters PRO First Take provides an analysis and recommendations for IBM Emptoris customers, including how they should think about an overall migration to a third-party solution as well as the role of IBM and its professional services organization as an advisor in the transition.

This brief also provides insight into comparable SAP Ariba solutions to those that Emptoris delivers, as well as comprehensive shortlists of vendors in the spend analytics, sourcing, contract management and supplier management areas in a segmented frameworks for each, including SAP Ariba (e.g., suite based, best of breed, specialization, industry focus, etc.).

Finally, this PRO analysis offers insight into artificial intelligence (AI) and cognitive applications that SAP Ariba and IBM Emptoris may develop together by combining the Leonardo (SAP) and Watson (IBM) AI engines, as well as Spend Matters insights and research into different AI use cases applied to different disciplines within procurement, including sourcing and contract management.

Emptoris: A Eulogy for a Great Company

When the dust settles from the death of Emptoris, many people will quickly forget the debt of gratitude we owe to its founders, managers, software developers and various owners over its many years. Perhaps more than any other company from the first generation of procurement technology firms, Emptoris had a greater impact on the sector than even, I would argue, FreeMarkets, my former employer, or Ariba, for that matter. While others on the Spend Matters team will no doubt have additional comments about Emptoris on a personal level, I wanted to be the first to put some words to paper this morning.