Thursday, 19 March 2015

What's the Difference Between the 6 Nations Final and an eAuction?


                  
This Saturday (21st March 2015) is a very important day in the world of rugby. Not only are the final three games of the 6 Nations impending, the ball is literally in anyone's court as the title of champion could go to one of three contenders- England, Wales or Ireland. After England smashes France in the final game (kick off 5pm), we shall be crowned victor (fingers crossed!), and I shall celebrate with a pint of cider in the pub across the road!
We British are notorious for our love of sport, as pointed out by a French intern at Market Dojo a few years ago, who wrote a blog post for us, singing the praises of the British culture in one paragraph then calling us 'rosbeefs' in the next! (Just kidding Camélia. We know you love England really.)
Having spent the past month becoming au fait with all things eSourcing and eAuction (like my use of the French language there?), I can't help but draw parallels between sport and eAuctions. The thrill of watching your home team scoring a try at the deciding game of the 6 nations and the excitement of viewing a reverse auction in real time as suppliers bid on your product/service of requirement- in both results, you become a winner.
As the final gets underway, Ireland, Wales and England all have a chance at becoming victor- this really is anyone's game to win. The same also applies to the eAuction process were all of the players (suppliers) enter the event with equal chances of winning the tender, determined by how they perform in the auction.
You can be a hero whether it's scoring the winning goal at an all-important match, achieving the best result for your company and hosting a successful auction (or even as a supplier, winning a huge tender through an open and transparent auction process).
Hopefully England will be able to pull it out of the bag and give England that win we deserve this weekend. If they don't, I'll embrace my Irish heritage and cheer for them next year instead!

About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com

Wednesday, 18 March 2015

eSourcing4U: how to set up an eSourcing centre of excellence

Before their unfortunate demise, Phones4U were a wonderful client of our eSourcing and opportunity assessment tools.  Their procurement team was lead by the experienced Sandip Modi who had implemented a multitude of eSourcing programmes in his previous roles.  We were privileged to have been chosen as the eSourcing provider at Phones4U due to our on-demand, affordable pricing, consumerised ease of use and hands-on support.

Sandip had a very clear vision of how the eSourcing programme could be rolled out across Phones4U.  The strategy was to create an eSourcing centre of excellence whereby the individual Category Managers would package up their procurement projects to feed into the eSourcing team to conduct the online negotiation.   Once the eSourcing event was complete, the results would be handed back to the Category Manager to implement.

This is a different strategy to how we’ve seen other organisations adopt eSourcing, where many look to give each Category Manager or procurement person the ability to run their own eSourcing events.

There are of course merits and drawbacks to each approach.

Typical approach

Typically we’ve seen that each member of the central procurement team would be given full remit to run their own eSourcing events.  The licence holders could be a mix of Category Managers, Procurement Managers, Supplier Relationship Managers, Buyers, Analysts, Marketing Managers, Legal, you name it.   As well as running the eSourcing events, they would be heavily involved in all their other procurement duties from category strategy, purchase-to-pay, supplier management, evaluation and implementation, contract management and so on.  

The advantage of giving them direct access to the eSourcing tool is that it can empower the individual and raise their profile within the organisation; we’ve seen many a CEO of FTSE 500 organisations take an active interest in procurement’s eSourcing events.  The users gain additional expertise that can be called upon when needed, whether in their current role or the next.  Plus it’s a low cost way of training staff in best practice, especially if you ask your eSourcing provider to deliver this as part of their licence fee.  Lastly it means the individual has full remit across the entire procurement exercise and can use their in-depth knowledge to optimally conduct the eSourcing event without having to transfer their work to another person.

However the drawbacks do become obvious.  Since the eSourcing licence holders are so heavily involved in the myriad of other procurement duties, they quickly run out of time and capacity to administer the eSourcing events, even though the approach saves them time in the long run.  Fire-fighting becomes the order of play as opposed to strategic planning.  Fewer eSourcing opportunities arise, adoption reduces and before long the eSourcing tool is playing second-fiddle to the previous way of working.

Secondly since users dip into the tool on an ad hoc basis, they have little opportunity to become experts on the eSourcing process: be it the software, the guidance notes, the strategy or even support.  This can again inhibit the flow of the events and dry up the eSourcing pipeline, as it becomes a barrier instead of an enabler.

Recently we were talking with a FTSE 100 organisation that had purchased 40 user licences of an eSourcing tool (sadly not ours as yet!).  A year into that contract, only 1 of the 40 users regularly ran eSourcing events.  One!  I think that aptly sums up the downside of this approach.

Phones4U approach

By separating the roles of the eSourcing Managers from the rest of central procurement, it created a clear expectation that the procurement exercise would be conducted via an eSourcing event, unless there were valid exceptions.  The eSourcing Managers would proactively knock on the door of the Category Managers to ask for new projects, as this was their deliverable.  It greatly helped with adoption of the eSourcing process, and so it was no surprise that within months of our tool being taken up, all of the Category Managers were feeding their projects into it. 

The Category Managers could continue to spend 100% of their time on the strategic aspects of the procurement, such as the opportunity assessment, spend analysis, stakeholder engagement, market information, creating robust tender documentation, supplier evaluation and so on.   

The eSourcing Managers would spend 100% of their time on becoming experts with the tool, perfecting the eSourcing rules and guidelines, scoping the event strategy, managing the eSourcing events and conducting any reverse auctions.
The eSourcing team would be unencumbered by the internal politics and getting bogged down in the category strategy, project management, supplier award and implementation procedures that typically reduce the flow rate, i.e. adoption, of eSourcing.  

By doing this, it was quite realistic that a single eSourcing Manager could handle over a dozen full-scale eSourcing events a month.  We’ve heard of several FTSE 100 companies that run fewer events than this across their entire team of 20+ eSourcing users!

Naturally there are some drawbacks.  The Category Managers are responsible for the procurement yet can feel peripheral to the more enjoyable aspects of using an eSourcing tool and running reverse auctions.   However that can be mitigated by adding the Category Managers as key viewers of the eSourcing events and holding the reverse auction days with everyone present.  This would also help promote the communication between the eSourcing team and the Category Managers on important tasks like supplier Q & A.
 
Furthermore, for an organisation to justify employing people who are solely dedicated to running eSourcing events, you must have confidence in both the eSourcing process and its suitability in the organisation.  This is where an experienced procurement professional like Sandip had seen time and again that eSourcing is a vital tool to help procurement deliver optimal results.  So instead of spending a fortune on say 40 eSourcing licences, you instead employ an eSourcing expert and a single licence to channel your events through the centre of excellence.

This may well mean we as Market Dojo only sell one or two licences to a FTSE organisation instead of 40, but ultimately we want you to succeed with your eSourcing initiative rather than profit from your struggles – and we promise you won’t find many providers that share that view!

That said, once the centre of excellence was underway at Phones4U, they had Category Managers knocking on their door asking to run the next project themselves, with the eSourcing team in support.  That's the perfect next step for rolling out the process to the wider community.

Now we’ve shared our views, which approach would you take in your organisation and why?


About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com.

Friday, 13 March 2015

CIPS Middle East welcomes Market Dojo

Some exciting news fresh off the press is that we shall be attending the CIPS Middle East conference on the 11th May 2015 in Abu Dhabi.

This is courtesy of a generous invitation from our regional partner, ArcBlue / PMMS Consulting, who are sponsoring the event.

Their Dubai-based team provides a range of support to clients including training, organisational assessment, process development, coaching and mentoring, capability assessment and general advisory.   PMMS are also the sole provider of training services for CIPS in the MENA (Middle East and North Africa) region and have been using our tools as a training aid for the workshops.

We feel that the Middle East is an exciting market for us, given the extreme ease of use of our tools to benefit those who are less familiar with eSourcing.   Coupled with our very low entry price of just £500, there is a real opportunity for companies to give it a try with negligible downside.

So, if you are also due to attend the event or shall be in either Dubai or Abu Dhabi over that period, please do let us know so we can arrange to meet.  We have a few days spare during our flying visit and would welcome the chance to speak with as many of you as possible to lure us away from the pristine beaches!

About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com

Monday, 9 March 2015

AND THE WINNER IS...

At eWorld on Tuesday 3rd March, visitors that came to our stand entered their businesses cards into our prize draw to be in with a chance of winning one Market Dojo Licence, encompassing an ENTIRE MONTH of full access to Market Dojo for one user with a value of £500!

At the end of the day, I pulled the lucky card from our jar (as you can see from the video featuring Alun and myself).


And so, our winner is...
…. Zael Prestel from Barclays bank! CONGRATULATIONS Zael! We hope you enjoy using our eSourcing software and can’t wait to see how your first eAuction goes!

If you entered our competition and unfortunately were not succesful, there will be another opportunity to win a license on 22nd September when we return to eWorld. So make sure you pop by the stand and say hello!


About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com

Thursday, 5 March 2015

eWorld March 2015 - A Procurement Rookie's Perspective

As of Monday 2nd March, I became Market Dojo’s first official employee and the very next day, my knowledge and skills were put to the test as I awoke to my alarm at 4am for my journey to eWorld!
 

Market Dojo has attended nine eWorlds to date, however this was my very first visit to the exhibition. Coming from a marketing background with little experience of the Procurement industry, I found the day incredibly insightful, extremely beneficial and as I wandered round the stands, chatting to various suppliers/competitors/partners, everyone was really friendly and keen to teach me about the ins and outs of the world of Procurement.

As we made our way from Westminster tube to the conference, I was introduced to Mr Peter Smith from Spend Matters, whom we later got a chance to show our new Lot Matrix to, and we carried on our merry way to the conference. Upon arrival, we were greeted with a free gammon roll (many thanks to the eWorld team), a cup of coffee and began to load our stand up with our promotional material. We shared our stand with one of our partners, the consultancy firm Baker Wanless, and I met one of the consultants, the lovely Angela Olszewska.

A fantastic stream of people passed by the stand as we were situated next to the entrance.  As a result, we were never at a loss for people to speak to, demo to and just generally chat to about our love of e-sourcing and e-auctions!

I attended a talk by Tania Seary of Procurious about the benefits of Social Media to the Procurement world and watched her handle some pretty tough questioning from a few fellow  listeners which opened up an interesting debate.

As far as conferences and trade shows go, I have attended a few in my time in various sectors of business and this BY FAR has been one of the most dynamic, welcoming and (most importantly) successful that I have experienced.

We look forward to following up with all the people we met and bring on eWorld 2015! 


About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com

Monday, 2 March 2015

Two firsts for the second of March

Today is the second of March and spring is on its way. It's also a landmark day for Market Dojo with two firsts to celebrate.
By Jongleur100 (Own work) , via Wikimedia Commons

As we have grown we have used offshore teams, agencies, consultants, contractors, interms and even MBA graduates as it has given us an ability to flex as we grow. However today we welcome our first permanent employee! We are very excited to bring Anya into the team. She will be helping us with our Sales & Marketing efforts.

Today is also the first day for our new office, in Stonehouse near Stroud. In the past we have successfully been using the Bristol Business Science park and also working remotely, using cloud technologies to collaborate. Now we felt the time had come where we need a more permanent location where we can drive the business forward. The location is perfect and you are always welcome to come visit us.

So, like the weather here in Stonehouse, we are feeling sunny and upbeat.

PS we are exhibiting at eWorld in London tomorrow.  Do please come and say hello if you are attending.



About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com

Wednesday, 18 February 2015

Auctioning the elderly - what is the real story?

CC Image courtesy of Kevin Dooley

The Daily Mail recently published an article about how elderly people had been auctioned off to care homes on the internet.

Of course, the Daily Mail specialise in creating provocative content which people will want to read. This article received 740 comments, which is far better than my average blog post.

Market Dojo does not provide the IT system identified in the article. We did want to provide an alternative viewpoint on the story.

So, lets take the key points in turn...

At least a dozen local authorities are listing vulnerable people's details

There doesn't seem to be any suggestion that the local authorities are sharing details with anyone other than those approved to see them. Indeed, the registration process seems to be very thorough. In common with Market Dojo, only approved companies would get access to the details of the event. These details would be required in any kind of tender process to enable to vendors to bid accurately against the requirement.

Ages and care needs including medication sent to up to 100 care firms

Well, yes. It is wise to provide details if you want to find a provider who can care for the person based on their individual needs.  I am quite sure that an ethical firm would require this information before they would be able to provide an offer of care for someone. Without knowing their individual needs, how could they be expected to provide proper care for them? Using an electronic approach allows you to spread the net wider, which means finding a better match for the individual's needs and the auction element of this is simply for the last stage to negotiate the price.

They pick which people to bid for - and cheapest offer nearly always wins

Yes, this isn't suprising.  Generally this only happens after the following steps have taken place:
- The suppliers have been screened to ensure they can offer the level of care which is required.
- The screened suppliers have assessed the persons needs to ensure they can provide the appropriate level of  care.
 - All suppliers have agreed to meet the required SLA's (Service Level Agreements)

This makes it unlikely that the cheapest supplier is offering an inferior level of care. In fact, by comparing bids from several suppliers, it is easy to identify anyone who is cutting corners and offering a much lower price than everyone else.

'eBay-style' system 'awful' and 'just uncivilised'

The comments seem to refer to the funding crisis for elderly care. This is a cause I completely support and commend Roz Altman for speaking out on this issue. For local authorities who have been tasked with using fewer resources more efficiently, a reverse auction makes a lot of sense. The process can be completed faster, leaving the clients and their families with a shorter period of uncertainty at a very difficult time. By putting strict quality criteria in place (a point mentioned but not emphasied in the article) the local authority get the best possible standard of care, whilst ensuring that private companies are not able to make excessive  profits at the taxpayers expense. Again it should be noted that this is no different from any tender process except by the use of an auction the negotiation is more efficient, and not to mention completely transparent.

Health group leader: 'It's an absolute disgrace - it's like a cattle market'

It wasn't clear to me why the system had been compared to a cattle market. I suspect that this was because an auction was used to match them with care firms. Whilst it's true that cattle markets use an auction approach, I think that is really where the similarity ends. An auction is an efficient and fair method to identify the best match for a specific set of requirements. Whilst price is a factor, auctions can also consider quality factors as the councils quoted in the article clearly said.

The article did raise some serious issues where vulnerable people had been sent to homes which were zero rated on a councils own quality scale. I'm glad that these problems were highlighted. I would have liked to see more investigation into the reasons why. When used correctly, an auction can help prevent this type of issue. They provide a clear view of the different choices available. I think it's quite wrong to relate these issues with the use of an auction system for the sake of a good headline.  In fact this is far more related to how the SLA was defined and how the contract was awarded and managed.

In summary

- Unlike eBay, the details shared on reverse auction systems are only available to companies who are approved to see them and who have agreed to the SLA's
- Using an online tool simply increases efficiency. It saves time and money allowing those resources to be used in other areas.  In reality the process is no different from any paper based tender.
- Auctions are an efficient method to find the best offering for a particular set of needs. They do not need to focus only on price.
  - Contract management needs to be carefully reviewed to ensure all SLA's are adhered to following the tender. Any suppliers deviating from these would not be a result of the method for price submission but rather refers to their attention to detail and rigor during the tender process.


About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com