Procurement Technology Review of EC eSourcing and EC Optimize
EC Sourcing Group – A Practitioner’s Perspective
by Kumar Kannen at Procural:
I am going to dig into the fast-evolving world of sourcing technology from a practitioner’s perspective as part of an on-going series. Most reviews that I have seen are too high level and don’t provide enough detail to decide on whether a software is interesting enough to invest more time into investigating deeper. My focus is to review niche and emerging sourcing software or eSourcing for mid-size companies who don’t have tons of resources to throw at complex technology implementations but still want to do 21st century sourcing. I will review up and coming but less known software that may be just as a good a fit for you as the more established ones.
Let us address head on the debate around suites versus best of breed (or niche). Sourcing suites include the likes of Coupa and GEP, which cater to end to end sourcing activities. Best of breed software are those that focus on a subset of sourcing processes such as Icertis for contract management. The answer to the question of whether you should invest in a suite or go for best of breed is – It depends. I will admit a bias towards best of breed from two perspectives: simplicity and cost. They are focused on solving a specific problem and can be selectively applied to those sourcing processes where maximum value can be extracted, easier to implement and they usually cost less. A CIO friend said, any software can be integrated easily, so, focus on the problem you wish to solve and apply the best technology there. I like that clarity.
With that in mind I looked at EC Sourcing. EC has a suite of modular offerings, so it’s not necessarily a true niche player. Allow me to describe some of its features and functionality, which are useful to practitioners; this is not an exhaustive list. [In the interest of full disclosure, I am a customer of EC Sourcing, and I am not being paid for this review.]
Functionality Features & Benefits
- I particularly like the combination of standard eRFX, reverse auction and optimizer functionality in a single solution.
- eRFX – Several of these are probably available in many eRFX applications.
- The software allows up to 120 team members to participate and score RFP responses. I don’t know if you will need that many but its nice to know this is not a limiting factor.
- You can specify certain documents must be received before the supplier can access the RFP, such as signed NDA.
- Previous RFX’s can be reused as templates. This is a big-time saver for RFX creators.
- You can specify mandatory questions, without answering which a supplier cannot submit the RFP.
- All supplier communication can be done from within the system, thus storing all communications related to a project in one place.
- Suppliers can see how they rank after the scoring process and adjust their bids, even before actual shortlisting and negotiations. I think this is a nice feature to use selectively at the right stage in the process.
- Optimization engine – this is an optional module and very useful where you have multiple suppliers bidding on hundreds of line items each. The optimizer will run through all the bids and cherry pick the lowest ones, use some other constraint such as 25% of the business goes to a named supplier, 50% remains with any incumbent supplier or something else. You can use the Optimizer recommendations to award or negotiate further with a higher priced supplier. It is very useful for example in transportation, MRO, and temp labor bids. Time to evaluate proposals will also be reduced significantly.
- Reverse auction: An online reverse auction or eAuction is a dynamic event where suppliers are bidding in real time versus their unnamed competition to win your business. The suppliers will lower their bids based on the real time feedback on how they are positioned versus competition. Auctions are effective for certain categories and should be selectively applied.
Ease of implementation: Medium – you can subscribe to the modules you require, making it less complex than a full suite implementation, but more complex than a niche software provider.
Support: EC scores high on customer feedback from published reviews. Based on my interactions with them (a data set of a few interactions), I have found them to be very responsive and easy to do business with.
Flexible subscription model
- Annual subscription pricing is reasonable. It is much lower compared to suites, but higher than some pure play eRFX solutions.
- Modules such as Optimizer are optional, and you may be even able to turn on Optimizer on an as needed basis. I really like this pay by the drink option.
- Finally, you can always use EC on a project basis thru EC partners (cheaper than an annual subscription). This is a unique feature that I have not found with established sourcing software providers.
Features that could make it even better
- Slicker screens – EC screens are functional but who wouldn’t like cool Amazon-like screens?
- EC is not the simplest sourcing software I have seen. It requires 4 – 5 hours of training, and then some support when you use it the first couple of times. In fairness, more features and functionality translate into more complexity; so, there is that trade-off. Alternatively outsource the bidding mechanics to EC or one of their partners – some added cost.
- There are more fields than a simpler eRFX tool, but they are optional. Obviously, the more data you have the better analytics you can get.
- Natural language processing – create a requirements document or a sourcing requisition form using speech to text, are examples.
- A mobile app? Maybe. I am somewhat ambivalent on this because it will be difficult to do on a small screen the activities done using this solution. But a mobile app is said to be on their architectural roadmap.
Who would get the most value from this software?
- I think mid to large size companies are probably best positioned to extract maximum value from the software. The software has some complex feature sets that will require a company to dedicate resources to learn and use it effectively. EC has an impressive portfolio of customers. It is probably not a solution for small companies except for a targeted engagement through an EC partner.
Where is the maximum value for the user?
- Optimizer: This is a unique feature set that few software applications offer. Jaggaer which bought Sciquest is an example. A user with large transportation or MRO spend can benefit greatly from this tool.
- Reverse auction: If you apply reverse auction selectively, there is significant value to be unlocked.
- Cost: EC offers a reasonably priced annual subscription model; Alternatively, you can use the tool on a project-by-project basis through an EC partner, thereby lowering your cost further; this approach also makes it easier to kick the tires before you decide to invest in a software subscription.
If you have comments or questions email me at firstname.lastname@example.org.