Spend Matters Vendor Analysis:CombineNet
To keep our readers (and ourselves) up to speed on technology developments, we field numerous briefings and product demonstrations at Spend Matters. This new Vendor Snapshot format provides a succinct look at the technology reviewed — with a side order of quick, honest analysis. This lighter format aims to complement our regular, deeper analysis based on both in-depth solution testing and actual customer interviews. Your feedback on our new format would be appreciated.
CombineNet has long been the gold standard for advanced e-sourcing with a focus on heavy lifting in the bid analysis area — the term ‘optimization’ has nearly becoming synonymous with the company.
Usage example: polymer resin for a PET bottle supplier. The client specifically breaks out the resin content in their bid equation, and collects extensive detail from suppliers. This enables optimization scenarios where they can look at commodity price sensitivity and adjust supplier allocations since different suppliers have different resin content in their products. This approach has helped the client address and better weather commodity price changes.
CombineNet provided Spend Matters with a look at their ‘ASAP’ (Advanced Sourcing Application Platform) product — a demo focused not only on optimization capabilities but also on more general sourcing functionality.
- Great technology with maximum geek factor delivering an immensely powerful, yet easily navigable solution with all the power and none of the hassles normally associated with optimization –– almost disappointing not to discover any holes or weaknesses in the sourcing tool!
- On the flip side, CombineNet’s purist sourcing solution is a tad old-school in its narrow focus. There is no SIM (supplier information management) module, no CM (contract management), no P2P (procure to pay) and no SA (spend analytics) built in. (The “missing” CM and SA components have been addressed through recently announced partnerships with Upside and Spend Radar).
Analysis and Observations
- Excel and wizard event builds: lots of user guidance in the build process with full offline starting point in Excel, or online build in CombineNet’s 6-step “RFxpress Wizard.” The online wizard is especially nice, with remarkably complex functionality jammed into six quick steps.
- Templates: extensive category-specific event template sets included to use as starting points as well as supporting repositories with client-configured event templates.
- Bid analysis: oodles of optimization options such as constraints around vendor counts, allocations on price and volume, tied to locations etc. It is obvious why CombineNet has a reputation as being able to handle any level of complexity. The friendly UI packaging is a bonus. The math challenges I remember from my own undergraduate optimization studies are not included. 🙂
A widely used preset is called ‘winning greater than lowest‘ which shows both the winning bid (based on optimization constraints) and the lowest price bid, for each item. This allows buyers to assess the money left on the table by going with the supplier that meets their specific optimization scenario — optimizing cost is not the same as minimizing purchase price — and supports further rounds of “sharpen the pencil” negotiations.
- Sophisticated item and bid scenario builds: the concept of alternate bids goes far beyond allowing suppliers to place counter-bids with preferred item and quantity combo bundles. The CombineNet approach uses ‘package’ and ‘conditional’ offers. The packages are mainly focused on special prices tied to item bundles and the conditional events are more complex, essentially the solution can optimize a client’s entire supply networks — incorporating:
- Supplier capacities
- Contract terms
- Locations served — with warehouses and production facilities utilized, commitments
- Logistical aspects, lead times, min/max capabilities
- Volume discounts per location — rebates
- Projected growth of business
- Regional cost structures
- Visibility bonus: the extreme level of detail in the bid analysis should benefit everything from SOX compliance, to corporate governance, to getting internal buy-in and support around supply chain changes resulting from the sourcing activity — the solution seems to capture and model just about any post-bid analysis scenario.
- Multi-round events: a built-in practical real-world sourcing approach (meaning that a single event’s bid line can include several negotiation rounds) with interim bid analysis and down-selection of vendors. No need to close an event and copy results into a new activity. A clear GUI presented timeline defines any number of negotiation rounds, quiet periods etc. as part of the process. Presumably this also enables unique reporting features.
- Semantic nitpick is CombineNet’s use of the term ‘surrogate bids’ for proxy bids. I find the surrogate term a little awkward, since I associate this with an inferior substitute. Hey, I had to find something to complain about!
- The solution could benefit from full SIM functionality. It seems inelegant to capture RFI-type content in an RFX when this is better handled in a SIM solution. Inevitably the same vendor has to be used in multiple events and then you don’t know which data point is current and the same data gets collected repeatedly. With a SIM frontend shaking hands with ASAP, it would be even more powerful. Especially in a rollout with broad deployment — in rollouts with more specialist-centered corporate usage involving few vendors, this is not an issue.
- With automated third-party content feeds (e.g. commodity data and other price points that lie outside a vendor’s normal control) to dynamically augment and update complex total cost structures, it could conceivably be even better, but nobody does that — not yet, anyway.
Potential users of the solution should realize that this is an extremely deep product — we only scratched the surface during the demo — and while powerful, it is also user-friendly. We look forward to looking at client success stories in greater detail in future coverage. It’s obvious that you can run analysis in ASAP that goes far beyond what is humanly possible with Excel.
From selling, supporting and participating in the development of some of the best business-to-business solutions as well as briefly being involved with outright vaporware in the dot.com days, Thomas has developed a fairly keen sense of smell; helping him tell actual features and PR-speak apart.