Monday, 24 February 2014

DIY Opportunity Assessments a Reality with Category Dojo

Thanks to Kelly Barner for her recent post on Category Dojo (2/4/2014)

Opportunity assessments have long been tied to service agreements or consulting engagements. They are expensive to conduct, have a limited shelf life, and are often cloaked in mystery. Once the effort required to collect and analyze data has been completed, consultants may use the opportunity to sell additional services, making the case that they should stay involved in order to meet the category requirements or timeline associated with the sourcing waves.

Not all procurement organizations have the budget to bring in an outside firm to conduct an opportunity assessment. Those that do may prefer to be in control of the process and results themselves rather than being reliant on an outside group for collecting and interpreting information on their behalf.

In November of 2013, Market Dojo, a pioneering software-as-a-service (SaaS) company based in the UK, released Category Dojo. Category Dojo can be used alongside Market Dojo, their sourcing and auction platform, or Innovation Dojo, their buyer/supplier collaboration platform, or as a standalone solution. It enables companies to conduct their own opportunity assessments by putting them in the driver’s seat to enter category-level information about spend and then adjust the criteria weightings to prioritize sourcing opportunities, estimating savings and recommending the best sourcing strategy or route to market.

The algorithm that serves as the backbone of the assessment is logical, organized, and consistent. It allows each organization to establish and analyze criteria such as complexity, auctionability, time to implement and risk tolerance. The reports that are created by Category Dojo address a number of perspectives on the categories of spend in question, including Sourcing Strategy, Spend vs. Complexity, Time vs. Return, Savings Potential, and Power Balance. The Power Balance report applies the Kraljic matrix to help procurement see themselves in relation to their suppliers, as well as how their suppliers see them. It reflects the growing trend of placing an emphasis on collaboration with suppliers in strategic categories.

As with their other solutions, Market Dojo designed Category Dojo to be intelligent and easy-to-use with commoditised pricing. In fact, procurement organizations can create a portfolio and enter category information, run the algorithm, and access four of the seven reports for free.

Although Category Dojo is new, it has been received warmly by procurement practitioners. Companies in a range of industries are already putting it to use in-house. Housing 21, the UK’s largest non-profit care provider and a national leader in providing innovative, affordable housing for older people, were one of the first to use Category Dojo. They analysed over 45 categories side by side.

"Market Dojo has played a key part in driving our planning process in ensuring we ask questions on a consistent basis across all our spend categories,” said Paul McGinnes, Housing 21’s Head of Procurement. “This analysis has enabled us to obtain a comprehensive three dimensional result by comparing vastly different categories in a single unified format."

In an environment where the trend is to move everything to a services model, Market Dojo saw an opportunity to combine the advantages of SaaS solution with the independent capabilities of procurement organizations to allow them to conduct their own opportunity assessments. In addition to enabling companies to manage the process themselves, having hands directly on the solution means that adjustments to criteria can be done on the fly to better understand their impact on project prioritization and to facilitate conversations with executives and internal stakeholders.

As we’ve noted in the past, Market Dojo never releases functionality without having their sights set on the next goal. The Category Dojo mobile app for ipad and iphone has just been released. They are also looking at building additional capabilities around savings tracking at the category level. Stay tuned for more, and file under ‘Savings Dojo’.

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