Services e-Procurement: The Next Generation

CascadeWorks launches version 3.0 of its Clarity suite

San Francisco, Calif.  October 2, 2001  Services e-procurement solution provider CascadeWorks this week rolled out version 3.0 of its flagship software suite, adding new feature sets covering spend management and business relationship management, as well as a new enterprise integration layer.

CascadeWorks' Clarity allows companies to manage their services spend online and in an automated fashion. The new features add more extensive financial management capabilities for services e-procurement and the ability to configure the application to match the unique processes and system integration requirements of a particular business.

"This release of CascadeWorks Clarity represents a major advance for both the company and the category of services e-procurement," said Diana Jovin, CascadeWorks' CEO and founder. "With services expenditures representing, on average, more than half of annual Fortune 1000 purchasing dollars, services e-procurement is clearly the next frontier in corporate cost savings. CascadeWorks is the first to answer this immediate, significant and strategic enterprise need."

Jovin said that with this new release, CascadeWorks has focused on providing features that will help companies achieve a more rapid return on investment (ROI) through the their use of the services e-procurement application. "In this economy, companies are increasingly interested in feature sets that drive immediate cost savings for the organization, so the types of enhancements that we have provided continue to be focused on capabilities that drive ROI."

To that end, the new features in the 3.0 release include spend management capabilities such as detailed cost-code tracking for more accurate allocation and reconciliation of costs; change order management; configurable billing terms; financial reporting; and proactive notifications triggered by configurable business rules. Jovin said that CascadeWorks added these features in response to customer requests for greater control over their services spend. "The types of features that the companies requested over the past six to nine months really focused on providing more fine-grained visibility and more configurability in how they manage the spend in the area of services," she said.

The new features, for example, allow a company to track a contractor's time across various projects and departments, permitting group- or project-level tracking of the services spend. A company could also set up e-mail alerts to be sent out to project managers when they reach, say, 80 percent of their budgets so they can either extend the project or wrap it up.

Business relationship management features enable control of application behavior at multiple levels in order to support business unit processes while maintaining consistent, enterprise-wide policies and visibility. The features include a responsibilities framework that directs the assignment of workflow approvals based on group specific, company defined job responsibilities; enhanced group management features to associate roles and users with specific business units and support each group's processes, policies and best practices; and cost-code sensitive approval routing.

The new enterprise integration layer provides a set of connectors to integrate Clarity with major corporate applications such as ERP, procurement and accounts payable systems. "One thing that we've heard pretty consistently is that companies don't want [services e-procurement] to exist as a standalone process," Jovin explained. "They really want this to be tightly connected to a lot of other enterprise systems in the company."

The new version also includes an open XML interface that supports automatic point-to-point integration based on application business events, as well as an integration engine that provides an infrastructure for the secure, asynchronous transfer of data between systems and applications.

Services e-procurement has not garnered the same level of attention as the online purchasing of direct and indirect materials, although the potential ROI could be significant. For example, services, Luther Harris, procurement director for administrative and energy services at Texas Instruments, which has been implementing the CascadeWorks suite, believes that his company will save 8 percent of its total contract labor and consulting services spend, or perhaps as much as $16 million per year. The savings would come both from hard dollar savings realized through discounts shared with suppliers and through savings from being able to negotiate better contracts by consolidating the company's spend.

John Mann, a senior consultant with Boston-based Patricia Seybold Group, said that companies should be mindful of the potential for services e-procurement. "This application should be on the industry's radar screen&in part because the industry should be aware of a new class of applications that supports collaboration across the Internet," Mann said.

CascadeWorks is a privately held company with venture capital backing from New Enterprise Associates. CascadeWorks' other customers include ABN AMRO North America, Autodesk and Charles Schwab.