To get us started, give us a little background on Market Dojo and the team.
Two of the founding Directors, Alun Rafique and I, worked as cost reduction consultants for a nearly a decade combined. We helped companies like BP, Asda, Tarmac, Meggitt, Rolls-Royce and others to reduce cost and risk in their supply chains through strategic sourcing, tactical negotiations, supplier workshops and managed e-auctions. During this time we noticed a gradual shift whereby companies wanted to carry out the activities in-house. This gave us the seedling that became Market Dojo, the business-to-business e-auction software provider.
Our third Director, who used to work as an IT database specialist, but now currently designs complex data analysis software, has created solutions for companies like Tesco, Argos and Best Buy. Therefore between us we feel we have all the necessary skills to create and manage an e-auction software company. Our goal is to enable small and medium-sized businesses to run their own e-auctions successfully.
There are already so many players in the market – why enter the scene now?
We think that the timing is ideal. We’ve noticed procurement organisations are facing new challenges as many of their clients who have enjoyed their services now wish to self-manage e-auctions to reduce costs. Businesses have also learnt from the consultancies and there are an ever-increasing number of educational e-auction courses available. Thus we have focused our company to supply the procurement professional with a commoditised solution. We are not aware of any other e-auction providers that offer a product which is openly and reasonably priced (with no hidden prices or price escalations), yet easy to use and adopts professional processes to ensure success for third party use. Furthermore the “cloud”, which is big news at the moment, allows us to provide the software-as-a-service solution to a very broad market with no set-up costs.
Our offering, which aims to provide businesses between $5m and $500m annual turnover with the tools required to run their own e-auctions, is very neatly spaced in its own market niche. A number of our competitors would struggle to keep their skilled consultant workforce if they approached this market with our philosophy. We believe this is exemplified by Ariba divesting their consultancy arm of the business to Accenture. Both experienced professionals as well as complete novices are able to use our software. We embed best practice into the software, which means our support costs will be greatly reduced.
One of the distinct things about Market Dojo is your credit based pricing system. Why did you choose to take this approach rather than just charging straight GBP for a license?
The credits model is to give us and our clients flexibility. What we offer is a solution that caters for 90% of the e-auction market as standard, but with modular functionality to satisfy the remaining 10% of users, for example having bespoke categorised participant databases or using advanced reporting. Our clients can expend credits to add such functionality to their account, if they so choose, and can make this choice once their experience and requirements develop, i.e. once they feel comfortable.
Credits also allow clients to consolidate their purchasing and invoicing transactions and allow them to continue to use their account uninterrupted. This works in the same way as something like ICIS LOR, the plastics and chemicals market price database. Credits can be purchased in bulk by our clients to be used how they want, when they want.
For us the credit system is an advantage because the consolidated invoicing also aids our cash flow. Furthermore the credits allow us to carry out some great marketing initiatives. For example, exclusively for Buyers Meeting Point, sign up with Market Dojo before the end of 2010 and drop us a line quoting “Buyers Meeting Point” and we shall give you 25 free credits towards your first event, plus a further 25 credits in return for a case study.
One of the challenges of running a successful auction is being absolutely prepared. How you plan to be sure that users of the Market Dojo solution have positive results – not just because the software is useable but because they have the knowledge in house to follow a good process in advance?
We completely agree that the so called "plug and play" e-auctions can require just as much work as the consultancy-led managed auction process to be successful. We have worked hard to inform our clients of the work and thorough process required, which is encapsulated in our free guides, yet by streamlining the process within the software we have managed to reduce the workload.
Whilst working as a consultant I recall assisting a client who wished to run their own e-auction. After initially agreeing to proof-read their RFP, I ended up re-writing it for them, as well as adjusting the spend data and Lot structure. However, despite our warnings, we just could not convince them to bolster the number of participants. In the end they received a mere 3 qualification bids and during the e-auction itself just one further bid was placed. It just demonstrated that the traditional "three bids and a buy" embedded itself in their process so firmly that even the e-auction became a part of it. However, there is also an element that because the company sought to run an e-auction themselves via software from a consultancy, there was a blur in the roles and responsibilities, which ultimately caused it to fail. At Market Dojo we counter this by clearly outlining the process in our guides and by taking on the clear role of a software provider.
Our past experience gave us a great learning platform to incorporate into Market Dojo. We have developed a number of features to make our clients, in their own capacity, run successful e-auctions. Firstly, we offer only self-managed e-auctions, therefore the clients know what to expect. To assist them we have created nearly 20 guides packed full of our consultancy knowledge and experience, which are free for all our users. We have established our own community site, called Community Dojo, which encourages the free exchange of knowledge and learnings from running e-auctions and using Market Dojo. We have created professional, step-by-step software that has information help icons for every title, button and action that not just state information but provide advice and tips as well. We also have professional support on stand-by in the form of e-mail, phone and Live Chat.
All of these features combined mean that we have used our past learnings to fuel the future success of our clients. Nevertheless, although we do focus on the software, we are a new company and we would be happy to go the extra mile in return for a testimonial or referral to make sure that our clients exceed their targets.