Pittsburgh November 20, 2002 e-Sourcing specialist FreeMarkets today took the wraps off a new software and services offering intended to provide companies with the tools they need to adopt new suppliers and more quickly realize potential cost savings.
The new Savings Implementation Solution combines software with supplier implementation services and is designed to help companies overcome one of the critical problems facing many sourcing organizations: ensuring that their enterprises actually realize negotiated savings.
"Bringing new suppliers on board in a timely manner is a daunting task that many companies struggle with because they lack access to the resources, processes and tools required to do it effectively," said Jay Odell, FreeMarkets director of product management. "As a result, they often fail to capture the full value of their opportunities for cost savings and operational efficiencies."
Tim Minahan, vice president of supply chain research at technology consultancy Aberdeen Group, agreed that savings implementation is a critical problem facing sourcing organizations. "Aberdeen's research of sourcing practices at U.S. and European enterprises uncovered a huge gap between negotiated savings and actual or realized savings," said Minahan. "While all companies interviewed by Aberdeen could negotiate significant cost savings with sourcing technologies, the majority was unable to fully implement or realize those savings."
Among the reasons Minahan cited for low savings conversion rates: lack of savings implementation strategies. "To fully realize the value of sourcing technologies, companies must design well-defined strategies and leverage enabling tools for implementing negotiated savings," said Minahan.
FreeMarkets asserted that software alone cannot solve the challenges companies face in bringing new suppliers online and is wrapping a various applications with implementation services.
On the software side, the solution offers such features as an implementation document library with permanent links to such documents as bills of material (BOMs), certifications, and quality and operational requirements. The software provides tools to transform implementation documents into a single content format to facilitate viewing and sharing of files, and an environment that facilitates collaboration on these documents with redline/markup and discussion capabilities.
A commodity-specific implementation process library can help companies standardize processes and leverage them across the organization.
The purported benefits of the new solution include accelerated adoption of new suppliers and more quickly realized savings, as well as tracking and reporting on implemented savings generated by strategic sourcing efforts.
The solution, which is generally available now, is offered as a hosted application.