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‘Creating a Request for Ideas’
Sourcing over the last 20 years has seen the evolution into the electronic age. Paper-based quotation processes have been replicated. Auctions were born out of the desire to negotiate efficiently. However, most new developments in this arena seem to be only incremental improvements on these existing capabilities.
At Market Dojo, we have already applied innovation to these areas by making them more accessible to an increasing number of professionals who want to use these tools. Now we have turned our attention to actually expanding on the procurement professionals toolset.
The first of these real innovations has been realised on the back of a grant from the Technology Strategy Board (TSB) whose mantra is ‘Driving Innovation’. We have unsurprisingly called it the ‘Innovation Portal’.
In our previous careers we ran reverse auctions on behalf of clients. A common objection from the procurement managers would be that the negotiation was too focused on price. As we moved into the software business ourselves as an e-Auction provider, we were compelled to quickly add a Request for Quotation capability (RFQs) and then weighted events (which can take account of non-price criteria). However, price is obviously still a major factor.
This made us think of how companies can drive blue sky thinking and real innovation from their supplier base by taking price out of the equation. Essentially a ‘Request for Ideas’. With efficiencies becoming increasingly important, addressing innovation in the supplier base becomes very challenging outside of a few preferred partners. For procurement professionals, time simply isn’t there for this enterprise and R&D departments do not have the relationship with their supplier base.
Many companies have asked us about approaching their supplier base and tackling this type of activity. For example helping with questions such as ‘How do we attain a 5% cost down of this component?’ or ‘Have you ideas for new packaging for this product?’ Your suppliers may have patented processes, new materials, special relationships that they can draw upon to be able to offer unique solutions. But how do you efficiently approach your supply pool and find this untapped knowledge?
Market Dojo came up with a solution, the Innovation Portal. We knew we would have to make it stand out from a simple questionnaire or a form submission (anyone can do that). It would need to include:
Our Innovation Portal allows companies (we call them Hosts) to suggest a topic to their suppliers (we call them Participants), attach documents and even highlight possible rewards such as gain-share arrangements. Hosts can invite as many Participants as they wish with obvious efficiencies from doing this electronically. Participants can then suggest detailed ideas including critical information around cost and implementation.
More importantly, Participants are also able to suggest their own topics and ideas to the Host for true two-way collaboration. Such topics can be further expanded by the Host who can then open it up to a wider audience of Participants.
Hosts score the ideas against criteria such as resource, urgency and financial opportunity. These component scores are then combined to create two driving factors: ‘ease of implementation’ and ‘priority’, which form the main axes, and it is against these criteria that all ideas can be assessed. This not only lets the Host consistently compare ideas within a topic but also compare ideas across a variety of topics thus enabling accurate prioritisation and planning.
Compare your ideas against the priority and ease of implementation
(with the size of the bubble representing the financial opportunity)
Understand where your ideas fit against the six scoring criteria
Communication around ideas can be tracked through the Message Board to give both the Host and Participants an auditable history, centralising all communication in one area instead of disparate conversations and emails. This means that the Innovation Portal is not just a place where the supplier ‘fire and forgets’ ideas but we give the Host the ability to challenge the Participant and refine the detail.
This simple, yet effective, way for managing the early stages of ideas will help pave the way for a possible Request for Proposal (RFP) or Request for Information (RFI). It gives the opportunity to efficiently examine blue sky thinking and forge closer relationships with your suppliers. It truly allows for a collaborative framework with your suppliers to rapidly progress innovation.
In fact the other fitting name we were going to give the product was the ‘Collaboration Portal’.
Contact us today and we’d be very happy to show you how your organisation can benefit from this innovative tool.
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