When it Comes to e-Sourcing, How Good is Free?

Earlier this week, I spent an hour on the phone with Steven Belli, the CEO of Source One, a sourcing and Spend Management services provider with 25 consulting professionals. We spent most of the time walking through their technology rather than talking services shop. In my view, what separates out Source One from the pack -- besides their contingency pricing approach and middle market focus -- is their innovative technology strategy. To wit, rather than license an off the shelf e-sourcing tool, they decided to build their own application and not only deploy it internally, but make it available externally to customers and non-customers alike -- for free!

Steven told me that they originally built Why Abe, the name of the application, for internal efficiency with their own consulting staff. Certainly, we can all agree that even basic event-based e-sourcing capabilities that replace phone, email, and fax can provide a huge process savings over old fashion manual approaches (both for consultants and end-users alike). But Steve also found that the application could help give his firm an edge in marketing as well by providing a knowledge transfer capability following an engagement -- without requiring their clients to spend more to license third party software -- not to mention providing a new source of leads and category intelligence as well.

Having demoed the application, I can say it is a fine place to start for companies that have not implemented an e-sourcing approach -- essentially, those who want to take an event-driven approach to sourcing as they begin their journey. Despite a somewhat rudimentary UI and some other short comings which I'll get to in a minute, the fact that this sort of capability is available for free shows how far the e-sourcing market has come in the past decade. I have no doubt that many middle market companies -- and even laggard Fortune 500 companies that have not adopted category and process driven sourcing platforms -- will gain a tremendous benefit from using free tools such as Why Abe.

From a feature / function perspective, the application enables basic event-driven eRFX and reverse auctioning capability (including the ability to create events with multiple line items). In the reverse auction mode, users can choose between rank-only and price auctions. The application also makes it possible to attach drawings, RFP information, etc. Perhaps the most handy and unexpected feature I found was the ability to export all event information into a Microsoft Office format if a user decides to use another application down the road. The application also embeds an approval capability allowing a company to designate multiple approvers for RFPs. From a global perspective, the application supports multiple currencies as well (though not at the same time).

There's even a supplier database search capability based on a marketplace-like interface for suppliers to register their services. Registered buyers can query this database to identify potential suppliers. I did not get into the depth of this supplier database, but I'm sure that it is much smaller than sites such as Thomas Register (which contain more information on supplier capabilities as well). But still, the supplier database component is a nice little feature to have. But buyers beware: the suppliers they invite to their events will also be registered on the system for others to use.

What are the application's limitations? First, I can best describe Why Abe's UI as E-Bay-like. While it is easy to use, it feels much more like a first generation consumer shopping application than what other vendors offer today. Second, Why Abe only automates basic processes, data gathering and price discovery activities. It lacks the ability to help companies manage categories outside of specific events, and within an event itself, there is no way to ensure category specific process or workflow. There are also no capabilities to enable such activities as supplier quality surveys, RFP collection templates and related template-based strategic sourcing activities. And there's not an ability to conduct weighted negotiations, let alone advanced decision support. These are more nits than anything else (and I could certainly go on if I wanted to). But seriously, the application is free, and there's no way one could expect it to compete with traditional applications on a feature basis.

From a competitive landscape perspective, I doubt that Why Abe will end up costing other vendors much in the way of lost business. But taking away marketshare is not Why Abe's or Source One's point. Breaking through to a market segment which is in dire need of basic automation is. In the end,I believe that Why Abe might even help such sourcing providers as Iasta, Procuri, Global eProcure, Ariba, and Emptoris when users decide they want to move past a basic, price-only event-driven sourcing approach to achieve sustainable category results or if they want to take a more specific, total cost savings approach to sourcing.

So what's my verdict? There's no doubt that the application is basic, but heck, there really is no catch or hidden fees. If you don't have privacy concerns about sharing your information and suppliers with others, why don't you decide for yourself and try it (but anyone with IP concerns should be mindful about sharing their internal information supplier lists with another party). I registered online in less than a minute and plan to experiment with it in the future, even though I have access to more advanced e-sourcing tools. For users, I have no doubt Why Abe will prove invaluable for middle market companies who are behind the e-sourcing times and are looking for a simple platform to automate basic sourcing and quoting activities. Larger companies might even adopt it on an ad-hoc project basis as well.

So why not give it a try and post your comments about it here? I'd love to get additional user feedback on it. Unlike Coupa, an open source eProcurement application which really is an enterprise application, Why Abe's event-driven approach lends itself to experimentation and one-off usage. Perhaps looking forward, companies will be able to truly "roll their own" free or low-cost customized e-sourcing capabilities using off the shelf capabilities from new Web 2.0 providers like Teqlo. But until then Why Abe definately is worthy of consideration as a free tool to get started with.

Jason Busch

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