Friday, 20 November 2015

Procurement Summit 2015 – a gold medal conference

Having made the three hour trip to (not so sunny) Manchester the night before, we awoke from our hotel and made our way to the Procurement Summit conference which was held at the Midland Hotel. The hotel at which we stayed paled in comparison to the grandeur of The Midland Hotel, which was probably the most exquisite hotel I have personally ever had the pleasure of visiting.

We arrived to set up our stand at 8am and were fortunate enough to be situated next to the entrance (and en route to the bacon rolls!), giving us the perfect opportunity to meet and greet all who attended.
The delegates were scheduled to arrive at 9am, however many arrived early, keen to get a good spot for the opening keynote speech by the Olympian Mark Foster, who bore a striking resemblance to our incredibly handsome eSourcing hero!
Nick Drewe and Mark Foster
- note the uncanny likeness to our eSourcing hero pictured right.
There were many interesting seminars throughout the day including the one from our very own Co-Founders Nicholas Martin and Nick Drewe on how to maximise the results of an eAuction. The talk went down very well with many people visiting the stand afterwards to ask further questions. One delegate kindly said it was the best seminar they had attended all day! The talk was based around our whitepaper which you can download for free here by registering on the platform.
At the end of the day we ran our prize draw for a month’s free licence of our eSourcing software. The lucky winner was Simon Perkins from the Birmingham NHS trust who will hopefully be able to use our tool to generate some fantastic savings.

Thank you to the team for putting a wonderful event together and to everyone that visited the stand. It was great to see some familiar faces and to also show our easy to use, on demand solution to lots of new ones. 

If you didn’t get a chance to attend the conference feel free to visit our website and sign up for free to learn more about what we do and find out how we could help you.

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

Thursday, 5 November 2015

How to Create a Sourcing Event Using Market Dojo

If you’re new to eSourcing and unsure of where to start with creating an event, this article from Tony Verheggen should help clear things up. As the Sourcing Process Owner at Air Products for 10+ years, Tony is a true expert in his field having run many auctions. He kindly went through the process of creating an event on our eSourcing platform and knocked up this article to give you an understanding of how simple eSourcing can be.

This flowchart is very helpful when creating an event within Market Dojo.

Step 1 - Creating the Questionnaire

To create a questionnaire you will need to check the following checkbox:

Questionnaires can be used to to gather information throughout the Supplier Engagement Process. Surveys, RFI’s, Assessments are all types of questionnaires. In the early stages Questionnaires can be used to assess one or more suppliers capabilities, be that manufacturing or services.  They can be used to understand the offerings in the marketplace, by providing a mechanism for suppliers to present the full breadth of what they do, because they can upload brochures as attachments in answering questions.  They can be used to narrow in on the right specification that fits your specific need.  Technical details and ideas can be exchanged through questionnaires. Terms and conditions can be finalized and agreed to before an auction actually takes place, so the only thing left to settle is pricing, and this is preferred. Even after contracts have been signed and the supplier begins performing under the contract, questionnaires can be used to monitor performance periodically.

Questionnaires constructed properly can save you time and money by getting the answers you need.  Here are a few examples of why one may use a questionnaire for a particular type of tender, with some example case studies of where these have been used within Market Dojo.

Tender Type
Reason for Questionnaire
Case Study
To ask your supplier about which regulatory good manufacturing practices they are following, so you understand their compliance to those regulations.
Metal Parts
You might need to ask about compliance to US conflict minerals regulations, where you would survey your entire manufacturing base about the origin of their materials.
You might ask questions about the capabilities of the software to see if it does exactly what you expect.
Use a survey to verify how tight the labor market is at the moment.

Doing the questionnaire before the RFQ or Auction is preferred because getting the answers later after the pricing is settled can lead to re-opening pricing discussions.  This destabilizes pricing, because now potentially you are asking the supplier for something different or additional, changing the scope or specification.  Change may be unavoidable, but much of it is preventable.  Settle all questions first before pricing.

A questionnaire can limit which suppliers participate in further events. There is a checkbox that allows you to change the questionnaire into a pre qualification survey. A pre qualification survey is one that acts as a gateway to all suppliers responding to the questionnaire, before it allows them into the full questionnaire.  They must give the correct response or they are denied access.  An example might be; suppose you wanted to make sure you kept the information in the questionnaire confidential, you could ask them if they intended to maintain its confidentiality, (yes/no).  A no answer would deny them access to the rest of the information and questions.

Additionally, there is a checkbox each for scoring and weights.
In early questionnaires you create, it is best to leave these unchecked, until you are thoroughly familiar with how they work, and have practiced in the sandpit.   This is a more advanced functionality, that helps resolve subjective differences in questions as well as internal team imbalances and avoid disagreements.  For example, a technical team member may weight the technical questions more than the commercial questions while a commercial team member might do the reverse.  As the Purchasing Leader, your role is to make sure the team works together and achieves an objective result they can live with.  Scores and weights help do this.  But in most cases where these are not concerns, it is best to begin creating questionnaires without scores and weights to simply gain maximum information from your suppliers. Use scores and weights to settle disagreements objectively.

Once you have received answers back from the Questionnaire to help you thoroughly define the specification or scope of work, now you are ready for the next stage.

Step 2 - Request for Quotation (RFQ)

The RFQ is used to define pricing in various stages of the process.  You can do an RFQ to define budgetary estimates so you can plan ahead.  Also, you can obtain early estimates of pricing to establish where the market price is.  Or you can use the RFQ to obtain confirmation of the final pricing, in which case if no auction is done, it would be the final stage.  It depends on what your strategy is and often what kind of time pressure you are under. The RFQ can also be used to define where the auction prices will start from.  Usually you want to know the range of prices among suppliers before you go to auction, Then the auction will use this information to set the initial pricing.  This information is essential in choosing the right kind of auction.

Typically an RFQ also includes questions that were not on the questionnaire.  These might ask suppliers for clarification of answers provided in the questionnaire, or obtain agreement to final terms with their final bid.  If you are in a hurry, or what you are buying is well defined, sometimes a quick RFQ can include simply an attachment with the specifications, and a terms sheet and a single item requesting pricing.  Turnaround times for these kinds of RFQs can be very rapid.

Qualification bids

If you progress from a RFQ, straight to an Open or Ranked Auction, then their bids will not be pulled through.  This is because during an eRFQ process, if there is no mention of an eAuction it would be unfair to assume those bids will be become the suppliers starting bids.  

However, if you have an eAuction without an eRFQ process, then you will have a qualification bid process.  This is exactly the same as a RFQ process but the bids will be pulled through as the initial bids in a open or ranked eAuction.  The benefit of these initial bids is that it lets you understand if the suppliers can log on, bid in the system, find mistakes in the specification, understand initial savings and let you know if your strategy is correct.

Step 3 - Auction

The final stage is an auction. There are several types of auctions available through Market Dojo which you may select from. We'll cover each type of auction separately. They are: Ranked, Open and Japanese auctions.   Let’s cover them one at a time and take care to examine the differences so you know which to use and when to use it.
Direction of price in a reverse auction driven by competition.

Ranked Auctions

These type of auctions receive multiple bids from suppliers and then as the bids come in, suppliers are ranked from lowest bid to highest bid.  The only information revealed to all suppliers is his/her rank in the bidding.  The key then for the supplier is to bid lower and lower to improve his rank until he is in first place.  If the supplier remains in 1st place at the end of the auction, then he is considered the winner of the auction.
The advantage of this kind of auction is that revealing rank creates a very dynamic and highly competitive atmosphere where suppliers must bid aggressively to discover and win the lead.  If many suppliers are bidding, it can lead to true market price discovery.  The other advantage is that it communicates to suppliers that there are many qualified suppliers who want this business.  Sometimes this message is critical to convincing suppliers, particularly the incumbent supplier that this material or service is a commodity, not a specialty and hence deserves commodity pricing not premium pricing.  Often times the incumbent will be in denial about the possibility that he will lose the business to others, even if the buyer tells him this is so.  But seeing is believing, and when the incumbent sees he is in 9th place, it goes a long way toward changing denial into a willingness to negotiate and reduce his price.  Sometimes it even takes more than one auction loss or loss of the business before the incumbent changes his view of pricing.

One of the disadvantages of this type of auction is that you need to have 3 or more suppliers.  If you have fewer, it leads to less vigorous bidding action.  Since the price is hidden, another disadvantage is that it takes somewhat longer for the bidders to find and reach the lead.  They may be cautious and try and creep up on the lead with many small bids, rather than jumping to the lead with one large bid, because they don’t want to overshoot the lead by a large margin.  They may also decide that second place is good enough, hoping that the lead bidder is later disqualified in some way, leaving them to pick up the business.

Open Auctions

In these types of auctions the suppliers see the lowest bid alongside their  own bid.  This allows them to see and take the lead by bidding lower immediately.  They know exactly what they need to do to take the lead.  This speeds up the pace of the auction as long as the suppliers feel they can meet or beat this price.  However as suppliers drop out, the competition may slow.  

One of the advantages this auction type offers is that suppliers don’t know if they are bidding against one supplier or many other suppliers.  You can run this style of auction with only 2 suppliers.   If your incumbent supplier already has a very low price and the other suppliers have much higher pricing, this auction style gives no incentive to the incumbent to move even lower.  He can take first place, and may remain there for the entire auction.  So it is important to have some idea how far apart the incumbent is from the other suppliers.  Also, by running this type of auction, you may reveal to the incumbent, not only is he the lowest price, but he may learn that he is significantly lower if none of the competitors can beat his bid.  This may be information you do not want him to discover.

Japanese Auctions

In this type of auction, the price ratchets down by a fixed increment every few minutes and the suppliers are presented with the offer price and an accept/decline button to push.  As the auction proceeds and the price drops they are asked to accept or decline each incremental price shown.  Continually accepting the prices shown means that the auction for that supplier will continue.  If the price drops below a price the supplier can accept, he must push the decline button.  If the supplier declines, fails to accept, or time runs out, the auction ends for that supplier.  It does not however end for other suppliers.  They may continue to accept the pricing as it lowers until they too drop out of the auction. The auction ends when all suppliers have dropped out, or time runs out.

This type of auction reveals nothing to other suppliers, which is important when you do not want suppliers to discover market information or their position relative to the competition.  It provides an incentive to all suppliers to accept bids until they no longer can.   This overcomes one of the disadvantages mentioned in Open bid auctions. It can also be run when there only a few suppliers available.  It does not however necessarily convince suppliers, especially the incumbent that they have significant competition in the marketplace.  They may even suspect they are bidding against themselves.  One of the other advantages over a ranked event is that a Japanese eAuction will help prevent bid shadowing.  This is where an incumbent will follow first place to be close but not to win the event knowing that a switching cost might negate some benefits of a small price saving. A Japanese auction gives no indication to the incumbent how the others are doing.


It is important to decide in advance what information you want to reveal in auctions before you select the auction type.  Also, what kind of market and competition do you want to stimulate during the auction process.  Once you have decided these factors, you can select an appropriate auction strategy.

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

Tuesday, 27 October 2015

How Top eSourcing Professionals Develop Lots

To help you get the most savings from your eAuctions, one of our partners, Dave Henshall, has written an article providing all the information you need to create an effective lotting strategy.

Lotting is the activity of grouping items efficiently and effectively to maximise participation in reverse auctions. How you structure your lots can have a huge effect on the overall savings achieved due to how easy/hard it is to bid in an event.

The article provides a wide breadth of information covering:

1. An Introduction to lots and lotting
2. Why Lotting is Important
3. How to Develop Your Lotting Strategy
4. Lotting strategy Summary

You can find this article in full on Purchasing Practice here.

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

Wednesday, 21 October 2015

The eSourcing eVolution Part III - The Future

This is the final part (read part 2 here) of a three piece blog providing an in-depth analysis of the evolution of eSourcing around the question: 

"What would Market Dojo be like today if it had started 10 years earlier?" 

In this section, we’re going to use what we’ve learned about the past to think about the vision of the future. Through analysing what we’ve learnt so far, a touch of market knowledge from the directors at Market Dojo, and a dash of foresight as to what we think the future holds for eSourcing, we should be able to adapt to any changes in the market/technology.

So how do we prepare ourselves? How do we mitigate the risk of becoming “just another” large provider? There are many interesting aspects we need to look at in regards to this and a number of potential concerns we need to be aware of.

Alun Rafique and Nick Drewe, co-founders of Market Dojo shared some thoughts on areas to watch out for in the future:

Mobile Technology

There have been recent changes in how Google perceives websites for ease of use with mobile devices. With respect to this and the future of design, we need to make sure we are responsive, searchable and usable across the mobile technology of the future.

Google (power of the web/search)
This is the biggest unknown and potentially the biggest competitor (at the moment, our biggest competitor is still email).  Will this develop enough and become intelligent enough to make eSourcing applications obsolete?

To mitigate this risk, we must do as any other successful modern SaaS provider and focus on the last ‘S’, not to mention being dynamic in our R+D.

We must ensure that our support is second to none on areas where strategy is crucially important. We predict that long gone will be the days of short-sighted support functions.  Instead the main differentiator in industry will be support personnel who focus on resolution of queries instead of simply noting them.  Training/help desk/light consultancy is where the battle may be fought.  Although this does not mean there is a need for consultancy alongside our offering.

The ability to integrate between solutions is already possible, but in the future it is set to become even more simple. We must look at ways to make it even easier to integrate with any product through standard connectors so that best of breed becomes as attractive as an ERP solution.

Silicon Valley investments
There seems to be a current trend at the moment within procurement software for Venture Capitalists to throw money into investing in particular areas such as P2P and eInvoicing.

To help us stay ahead of this, we must keep focussing on our USPs by continuing to provide an easy to adopt, completely transparent pay-as-you-host pricing model. That is how we will aim to combat this type of competition along with our friendly one-to-one service.
Amazon/Google/Apple B2B platform

eSourcing and P2P are fundamentally different. One is strategic. One is operational. It is unlikely that these eMarketplaces are going to be in direct competition with our focus on eSourcing.

However, diversification is very important. And we have our own eMarketplace concepts (focussing on sourcing rather than fulfilment) which should help protect us in the future. Watch this space…

Eradicating the user interface

Moving from slick user interface to 'no user interface', as per this Coupa article.  A rather controversial idea, but we can see some logic that instead of having to log into a tool every day, instead it fits around your life so you can interact with it outside the tool, e.g. suppliers responding to events via email with auto-doc upload/download, auto-messaging, auto-comparison of bids, etc.

True commoditization

As technology develops and the knowledge of eSourcing expands, the number of people using eSourcing will increase.  We will hopefully begin to see true commoditization of the process and tools, so it really does just come down to price in the lower end of the spectrum.  Eventually, it won’t just be large and medium sized enterprises utilising eSourcing, the smaller SMEs will be aware of and embracing it too.

Centralised eSourcing teams move in conjunction with local self-serve teams who even use the tools to get quotes on low value tenders of a few hundred pounds.

(See our video on the four stages of technological growth taken from a TED lecture.)

Not game changers, but here are some other areas to be aware of:

Voice Activation
Keeping up to date with developments eg. Google voice, Siri, etc. and how this may possibly impact us.
Geo-locational sourcing
So you can find better suppliers locally and search locally.
Integrated market information
Such as global new stories and how they affect your sourcing events.
More focus on AI
The software could take actions when it 'thinks' it is needed. e.g. delay an auction due to lack of liquidity, or suggest a better lot structure based on the bids received.
More automation
So the software will actually create and publish events without you needing to do anything.
Newer, more flexible technologies
As technology continues to grow and develop, we need to ensure we keep up to date with the latest news and trends  and ensure that our product move in line with this.
Commoditized combinatorial, expressive and transformational eAuctions
Making this usable to the majority.
Interactive content
In relation to how we market ourselves, we must ensure our content stays in line with technological changes and becomes more interactive.
Developing Countries
Competition from these countries is vastly improving and we must not overlook them. We can counteract this by keeping our development dynamic and increasing our brand marketing strategies. We must also market to these countries and think about ways to collaborate with as well as repel competition.
Public Sector Procurement
A big shake-up in the public sector software market to disrupt the legacy tools with their complex workflows and procedures to be a slick tool that people enjoy using.
IT will no longer play a part in the selection of SaaS tools
No more 100-page RFIs asking what software stack SaaS software is using and what the data hierarchy looks like.

Security barriers
Utilising new technology to address these and make eSourcing even more accessible.

How will people find us in the future, compared to how they find us now?
How will the power of search change in the future?
At the minute, the focus is on Content Marketing, but what next?

Exciting times lie ahead of us at Market Dojo.

In hindsight, with what we have learnt from looking at the past and analysing the potential future of an older Market Dojo, we must continue to pro-actively develop, adapt to and overcome any fluctuations in the ever-evolving technological environment, whilst remaining true to our brand values.

The latter is very important. By embracing new technologies to enable more seamless integration with other providers, we should be able to remain true to our original ideologies of putting the customer at the forefront of everything we do, whilst making our product as easy to adopt as possible and bringing eSourcing to the forefront of every business.

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