Strategic Sourcing Tools Analysis Final Report_FINAL_111209 AF Version

8/12/2019 Strategic Sourcing Tools Analysis Final Report_FINAL_111209 AF Version

1/92

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Headquarters U.S. A ir Force

Be Americas BestWar-Winning Capabil i ties on Time on Cost

Strategic Sourcing Tools and

Implementation Feasibility Analysis

Final ReportNovember 2009


2/92

Strategic Sourcing Tools AnalysisPage 1

Executive Summary

Introduction and Background

Technology Marketplace

Drivers of Cost and Timeline

Next Steps/Follow-on Guidance

Options Available for the AF

Appendix

Contents


3/92


The Air Force is interested in understanding the technologyavailable to support its Installation Acquisition Transformation(IAT) initiative and Strategic Sourcing Model

PROJECT BACKGROUND The Air Force has developed an iterative Strategic Sourcing Model that is currently supported by

various manual process steps

Through the IAT initiative, the Air Force is aiming to better coordinate strategic sourcing efforts

across the 71 installations

An enterprise strategic sourcing group consisting of ~240 acquisition personnel is being

established to centralize the sourcing of common supplies and services across installations

Similarly, major commands within the Air Force are establishing centralized sourcing teams to

help meet specific MAJCOM needs

PROJECT GOAL

Gain a high level understanding of the various Strategic Sourcing technology* vendors

and tools currently available in the marketplace that can support IAT and the Air

Force Strategic Sourcing Model

* Note: Strategic Sourcing technology is often referred to as Spend Management technology in industry


4/92


Three key takeaways were identified during the project

KEY TAKEAWAYS

1. The end-to-end Air Force Strategic Sourcing Model can not be completely

addressed by technology

2. The Strategic Sourcing technology marketplace is a growing and maturing market

from both a vendor as well as a user perspective

3. The Strategic Sourcing technology vendor market consists of 4 distinct segments

varying by capability depth and customer focus

The key takeaways are explained in further detail on the following slides


5/92

Strategic Sourcing Tools Analysis

Page 4

The Air Force Strategic Sourcing Model was put into a linear formatto show the overlap of industry capabilities

Commodity

Market Intelligence

Identify historical

requirements and process

Review past and present

business arrangements

Current Strategy

Review

Identify qualified suppliers

Understand industry trends

and cost structure

Define requirements

Standardize requirements

Requirements

Definition

Consolidate results and define strategy

Obtain approval for strategy

Sourcing Strategy

Development

Customer

Warfighter

Taxpayer

Rollout/resource strategy

Issue policy and/or

Execute demandmanagement and/or

Follow acquisition process

Strategy Execution

Monitor internal performance and

compliance

Administer contract (if applicable)

Integrate supplier relationship mgmt Conduct quality analysis

Performance

Management

Strategic

SourcingTeam

SB

PMO

StakeholdersLegal

PEOs

Contracting

Users

QA Reps

CORs

Finance

CE

Proj. Mgr

Buyers

Opportunity

Assessment

Current

Strategy

Review

Market

Research

Sourcing

Strategy

Development

Requirements

Definition

Strategy

Execution

Performance

Management


6/92


Key TakeawayFunctionality and Capabilities

Page 5

KEY TAKEAWAY/FINDING DETAILS IMPLICATIONS TO THE AF

1 The end-to-end Air ForceStrategic Sourcing model

can not be completely

addressed by technology

Supply Market Analysis and Demand

Management/Planning technology components

are not available

The following five functional components are

available from Strategic Sourcing technology

vendors:

o Spend Analysis components - Typically help

organizations collect and analyze historical spend

data

o E-Sourcing components - Typically enable eRFx,

auctions, negotiations, and sourcing optimization

o E-Procurement components - Typically supportthe entire procure-to-pay process

o Contract Management components - Typically

support the contract lifecycle from creation toclose-out

o Supplier Management componentsTypically

support all aspects of supplier relationships from

on-boarding to performance management and

reporting

The Air Force will not be

able to purchase tools for

Supply Market Analysis or

Demand Management and

Planning, rather, it will

have to rely on higher levelanalysis and synthesis

conducted off tool

The Air Force will want to

prioritize its requirements

and needs and decide

which Strategic Sourcing

functional components itwants to implement to

support its sourcing model

KEY TAKEAWAYSFUNCTIONALITY AND CAPABILITIES


7/92


Strategic Sourcing functional components available throughtechnology vendors can support most of the Air ForceStrategic Sourcing Model

Page 6

AIR FORCE STRATEGIC SOURCING MODEL

Opportunity

Assessment

Current

Strategy

Review

Market

Research

Sourcing

Strategy

Development

Requirements

Definition

Strategy

Execution

Performance

Management

Spend Analysis

E-Procurement

E-Sourcing

Contract Management

Supplier

Management

Supplier

Management

Demand

Management/Planning

Supply Market

Analysis

Strategic Sourcing Functional Components provided by TechnologyVendors

Not Available through Technology Vendors

There are no Strategic Sourcing technology tools that cover the end-to-end AF Strategic Sourcing Model, as no

functional components are available to fully support Supply Market Analysis and Demand Management/Planning


8/92


Key TakeawayStrategic Sourcing Market Growth

Page 7


2 The Strategic Sourcing

technology

marketplace is a

growing and maturing

market from both avendor as well as a

user perspective

The market is expected to realize a 10%

Compound Annual Growth Rate (CAGR)

through 2012

There is a growing emphasis from

vendors on adding additional basiclevels of analytics and reporting

capabilities

A number of organizations are changing

the way they are adopting and

enhancing their use of Strategic

Sourcing tools

The Air Force should

understand the market

trends to ensure their

path forward is in line

with market bestpractices

KEY TAKEAWAYSTRATEGIC SOURCING MARKET GROWTH


9/92


0.0

1.0

2.0

3.0

4.0

$5.0B

2007

$2.7B

2008

$3.0B

2009

$3.3B

2010(EST)

$3.6B

2011(EST)

$3.9B

2012(EST)

$4.3B

Page 8

The Strategic Sourcing technology marketplace is a growingand evolving market

GENERAL MARKET TRENDS

Steady overall market growth: The

overall market is expected to grow at a

10% Compound Annual Growth Rate

(CAGR) through 2012

Strong viability amongst medium to

larger vendors: Medium to larger

vendors have strong financial positions

and their viability is currently not a

concern

Limited consolidation activity:

Consolidation in the market has been

limited in the past 24 months, but isexpected to heat up in the 4thquarter of

2009 and 1sthalf of 2010

STRATEGIC SOURCING MARKET REVENUE

(2007-2012 EST)

Source: AMR Research, 2008


10/92


Key TakeawaysVendor Landscape

Page 9

KEY TAKEAWAY/FINDING DETAILSIMPLICATIONS TO THE

AF

3 The Strategic Sourcingtechnology vendor market

consists of 4 distinct

segments varying by

capability depth and

customer focus

Segments that typically provide commercially-focused capabilities:

1.Strategic Sourcing Full Suite Vendors (9 identified vendors)

Provide a broad range of functionality in a single integrated package

Many vendors do not have significant Federal experience; however, vendors

are placing a heavy emphasis on moving into the Federal space and are

considering providing Federally-focused capabilities within their tools

2.Limited Suite/Point Solution Vendors (57 identified vendors) Provide overall solution depth in targeted areas

CANNOT cover the entire AF strategic sourcing model

Segment that provides both commercially-focused and Federally-

focused capabilities:

3.ERP Vendors (3 identified vendors)

Have commercial and federal experience and provide broad coverage

Two vendorsSAP and Oraclecan provide both commercially-focused

and Federally-focused solutions

There are significant functional depth variations within their capabilities

Segment that provides Federally-focused capabilities:

4.Federal Government-Specific Tool Vendors (3 identified vendors)

Have tailored solutions that may cover some AF-specific contracting

processes well

Generally do not provide a full range of capabilities compared to

commercially-focused vendors; however, vendors are beginning to build out

their capabilities, specifically within analytics and reporting

When choosing a Strategic

Sourcing technology

vendor, the Air Force will

want to deliberately decide

between:

o Vendors who provide

commercially-focusedcapabilities and/or

Federally-focused

capabilities

o Vendors who provide a full

suite of functional

components or a set of

point solutions

KEY TAKEAWAYSVENDOR LANDSCAPE


11/92Strategic Sourcing Tools Analysis

Page 10

To provide the defined functionality, the Strategic Sourcingtechnology vendor market consists of four distinct segmentsvarying by capability depth and customer focus

STRATEGICSOURCING FULLSUITE VENDORS

Definition: Vendors whoprovide a full suite ofStrategic Sourcingfunctionality (at least 4

out of the 5 functionalcomponents) withvarying levels ofcapabilities

Identified Vendors: 9

Examples:Ariba,Emptoris, GlobaleProcure

LIMITED SUITE/POINTSOLUTION VENDORS

Definition: Vendors whoprovide only targetedStrategic Sourcingfunctionality (at least 1

out of the 5 functionalcomponents) withvarying levels ofcapabilities


Examples:Zycus,Procurra

ERP VENDORS

Definition:EnterpriseResource Planning(ERP) vendors who canprovide at least basic

capabilities for most orall of the StrategicSourcing functionalcomponents


Examples:SAP, Oracle,PeopleSoft

FEDERALGOVERNMENT-SPECIFIC TOOL

VENDORS

Definition:Vendors whofocus solely on providingfunctionality tailored toFederal-specific

contracting processeswith varying levels ofcapabilities


Examples:Compusearch,Distributed Solutions

STRATEGIC SOURCING TECHNOLOGY MARKET SEGMENTS

Typically Provide Commercially-Focused Capabilities Provide Federally-

Focused Capabilities

Can Provide Both

Commercially-Focused and

Federally-Focused

Capabilities

Many Commercially-Focused Vendors are placing an emphasis on working with Federal clients and some are

considering developing Federally-focused capabilities within their tools



In addition to vendors and capabilities, there are a number ofother major drivers that can affect the cost and time requiredfor the AF to implement Strategic Sourcing technology tools

DRIVERS OF COST/TIMELINE DESCRIPTION

Vendor(s) Selected/Functional

Components (Tools) Implemented

The type of vendor(s) selected and number and types of functional components that

will be implemented

Implementation Scale/ApproachThe scale (# of users, # of organizations, etc.) and roll-out approach (phased vs. non-

phased, timing, etc.) for implementing tools in the AF environment

Amount of Data/Content RequiredThe amount of internal (e.g., spend data, specification level, etc.) and external (e.g., #

of suppliers, # of catalogs, # of catalog items, etc.) data and content required

Customization vs. Configuration

Required

The amount of customization (changes to code) versus configuration (changes to

business rules without changing code) needed to meet AF requirements

Deployment/Hosting Model The deployment hosting model required by the AF

License Model The license model used by the AF (lease vs. buy)

Integration with Current Systems

Required

The number of touch points and complexity of integration required to connect to

current AF systems

Security The ability for tools to adhere to AF security requirements

Training Required The amount of training required for users to utilize the tools

Page 11

COSTS/TIMELINE DRIVERS AND DESCRIPTION



As next steps, the AF should focus on understanding its high-level needs and requirements and collecting additionalinformation prior to an acquisition decision

HIGH-LEVEL NEXT STEPS

1 Communicate and brief assessment internally to AF stakeholders

2 Reach out to other DoD organizations that have implemented Strategic Sourcing

technology tools to discuss lessons learned, implementation successes and

challenges, and overall experience*

3 Develop an understanding of high-level needs and requirements

4 Develop and send out a Request For Information (RFI) to collect more detailed

information from vendors around capabilities, costs, etc. aligned with the high-level

needs and requirements

5 Develop a business case to evaluate the effectiveness of Strategic Sourcing

solutions based on an understanding of total costs and calculation of a Return on

Investment (ROI)

6 Decide whether to move forward with an acquisition of Strategic Sourcing

technology tools

Page 12



Page 13

Executive Summary






Appendix

Contents


15/92

Strategic Sourcing Tools Analysis Page 14

The Air Force is undergoing an Installation AcquisitionTransformation (IAT) initiative focused on improving theacquisition of supplies and services

PROJECT BACKGROUND

Through the IAT initiative, the Air Force is aiming to better coordinate strategic

sourcing efforts across the 71 installations

An enterprise strategic sourcing group consisting of ~240 acquisition

personnel is being established to centralize the sourcing of common supplies

and services across installations

Similarly, major commands within the Air Force are establishing centralized

sourcing teams to help meet specific MAJCOM needs


16/92


The Air Force has developed an iterative Strategic SourcingModel that is currently supported by various manual processsteps


The AF model currently has

Limited visibility into spend,

demand, requirements, and

processes

Limited information sharing andcollaboration

Limited usage of standalone

technology tools that support the

various sourcing steps (e.g., SPS

for contract writing)


17/92


As part of the IAT initiative, the Air Force is interested inimplementing Strategic Sourcing technology tools that canaddress one or more steps in the AF Strategic Sourcing Model

BENEFITS OF STRATEGIC SOURCING TECHNOLOGY*

Strategic Sourcing technology tools can help the AF improve its Strategic

Sourcing Model by:

Automating processes

Enabling greater supplier transparency

Providing greater process visibility

Driving information sharing and collaboration

* Note: Strategic Sourcing technology is often referred to as Spend Management technology in industry


18/92


Censeo is helping SAF/AQC understand the current landscapeof technology tools that can support the Air Force StrategicSourcing Model

KEY OBJECTIVES

Identify key functional components and capabilities available in the Strategic Sourcing

technology marketplace

Identify Strategic Sourcing technology trends, vendor market segments, and vendor

landscape

Identify drivers of cost and timeline that the Air Force should keep in mind if/when

selecting and implementing tools

Provide guidance on next steps the Air Force should take prior to an acquisition decision

Identify various Strategic Sourcing technology options available for the Air Force

Compare key capabilities, experience, and implementation considerations of select

vendors

GOAL

Gain a high level understanding of the various Strategic Sourcing technology

vendors and tools currently available in the marketplace that can support IAT

and the Air Force Strategic Sourcing Model

PROJECT GOAL AND OBJECTIVES


19/92


Executive Summary



General Market and Technology Trends

Functionality and Capabilities

Vendor Landscape Drivers of Cost and Timeline



Appendix

Contents


20/92


Key Takeaways

Page 19


1 The Strategic Sourcing

technology marketplace is a

growing and maturing market

from both a vendor as well as a

user perspective

The market is expected to realize a 10% Compound

Annual Growth Rate (CAGR) through 2012

There is a growing emphasis from vendors on adding

additional basic levels of analytics and reporting

capabilities

A number of organizations are changing the way they

are adopting and enhancing their use of Strategic

Sourcing tools

The Air Force should understand

the market trends to ensure their

path forward is in line with market

best practices

2 The end-to-end Air ForceStrategic Sourcing model can not

be completely addressed by

technology

Supply Market Analysis and DemandManagement/Planning technology components are

not available

The following five functional components are available

from Strategic Sourcing technology vendors:

o Spend Analysis components - Typically help

organizations collect and analyze historical spend data

o E-Sourcing components - Typically enable eRFx,

auctions, negotiations, and sourcing optimization

o E-Procurement components - Typically support the

entire procure-to-pay process

o Contract Management components - Typically support

the contract lifecycle from creation to close-out

o Supplier Management componentsTypically support

all aspects of supplier relationships from on-boarding to

performance management and reporting

The Air Force will not be able to

purchase tools for Supply Market

Analysis or Demand Management

and Planning, rather, it will have

to rely on higher level analysis

and synthesis conducted off tool

The Air Force will want to

prioritize its requirements and

needs and decide which Strategic

Sourcing functional components itwants to implement to support its

sourcing model

KEY TAKEAWAYS (PAGE 1 OF 2)


21/92


Key Takeaways (Cont)

Page 20

KEY TAKEAWAY/FINDING DETAILSIMPLICATIONS TO THE

AF

3 The Strategic Sourcingtechnology vendor market

consists of 4 distinct

segments varying by

capability depth and

customer focus

Segments that typically provide commercially-focused capabilities:

1.Strategic Sourcing Full Suite Vendors (9 identified vendors)

Provide a broad range of functionality in a single integrated package

Many vendors do not have significant Federal experience; however, vendors

are placing a heavy emphasis on moving into the Federal space and are

considering providing Federally-focused capabilities within their tools

2.Limited Suite/Point Solution Vendors (57 identified vendors)

Provide overall solution depth in targeted areas

CANNOT cover the entire AF strategic sourcing model

Segment that provides both commercially-focused and Federally-

focused capabilities:

3.ERP Vendors (3 identified vendors)

Have commercial and federal experience and provide broad coverage

Two vendorsSAP and Oraclecan provide both commercially-focused

and Federally-focused solutions

There are significant functional depth variations within their capabilities

Segment that provides Federally-focused capabilities:

4.Federal Government-Specific Tool Vendors (3 identified vendors)

Have tailored solutions that may cover some AF-specific contracting

processes well

Generally do not provide a full range of capabilities compared to

commercially-focused vendors; however, vendors are beginning to build out

their capabilities, specifically within analytics and reporting

When choosing a Strategic

Sourcing technology

vendor, the Air Force will

want to deliberately decide

between:

o Vendors who provide

commercially-focusedcapabilities and/or

Federally-focused

capabilities

o Vendors who provide a full

suite of functional

components or a set of

point solutions

KEY TAKEAWAYS (PAGE 2 OF 2)


22/92


23/92


There are a number of general trends related to the overallStrategic Sourcing technology market, technology provided,and usage by customers

TREND AREA DESCRIPTION

General Market Trends General trends related to the Strategic Sourcing

technology industry including revenue growth, viability,

and consolidation activity

General Technology Trends General trends related to the tools that are being

provided by Strategic Sourcing technology vendors

including new functionality/capabilities, types of solutions

offered, etc.

General

Adoption/Usage/Management

Trends

General trends related to the way organizations are using

and managing Strategic Sourcing technology

The following slides show the current trends in the Strategic Sourcing technology

marketplace

STRATEGIC SOURCING MARKETPLACE TRENDS


24/92


0.0

1.0

2.0

3.0

4.0

$5.0B

2007

$2.7B

2008

$3.0B

2009

$3.3B

2010(EST)

$3.6B

2011(EST)

$3.9B

2012(EST)

$4.3B

Page 23

The Strategic Sourcing technology marketplace is a growingand evolving market

GENERAL MARKET TRENDS

Steady overall market growth: The

overall market is expected to grow at a

10% Compound Annual Growth Rate

(CAGR) through 2012

Strong viability amongst medium tolarger vendors: Medium to larger

vendors have strong financial positions

and their viability is currently not a

concern

Limited consolidation activity:

Consolidation in the market has been

limited in the past 24 months, but isexpected to heat up in the 4thquarter of

2009 and 1sthalf of 2010

STRATEGIC SOURCING MARKET REVENUE

(2007-2012 EST)

Source: AMR Research, 2008


25/92


There are a number of general trends in the marketplacerelated to the tools that technology vendors are offering

GENERAL TECHNOLOGY TRENDS

Increased emphasis on User Interfaces (UIs): Vendors are placing an added emphasis

on developing UIs. Good UIs are becoming more than just a "nice to have vendors are

increasingly selling their tools based on the quality of their interfaces

Shift to Software as a Service (SaaS)/On-Demand/Cloud solutions: Vendors are

shifting towards providing more SaaS/On-Demand solutions for many Strategic Sourcing

technology areas; also becoming known as cloud solutions

Focus on analytics, Business Intelligence (BI), and dashboards: Vendors are placing

a greater emphasis on adding additional levels of basic analytics, BI, and

reporting/dashboard capabilities as part of their technology tools beyond just spend

analysis.

Emphasis on providing value-added solutions/services: Solutions that combine and

integrate proprietary and/or third-party supply market and supplier content are becoming

more commonno longer are vendors competing on just technology, but are also focusedon their ability to deliver integrated solutions including content and market intelligence in

certain areasSource: SpendMatters


26/92


Furthermore, a number of organizations are changing the waythey are adopting, using, and managing Strategic Sourcingtechnology tools

GENERAL ADOPTION/USAGE/MANAGEMENT TRENDS

Increase in procurement data capture: Organizations are collecting more and more

types and quantities of procurement-related information (e.g., supplier diversity data)

through technology tools. Yet, few organizations are capable of fully rolling-up and

distributing this information to key decision makers and other users

Usage of full functionality is low: While demand and adoption are technically rising for

Strategic Sourcing technology, the average organization uses < 50% of the capabilities in

the solutions they chose

Investment in monitoring supply risk: Organizations are beginning to invest more and

more in technology and content to monitor supply risk in their supply bases

Purchasing of point solutions on the rise: Organizations are often purchasing different

types of Strategic Sourcing technology from a diverse vendor set (e.g., buying Contract

Management functionality from one vendor and E-Sourcing from another)

Increasing influence of IT: CIOs and IT organizations are starting to become more

influential in buying decisions (based on needs, security, integration, architecture, etc.)

despite the general dominance of external (SaaS/on-demand) deployment models

Source: SpendMatters


27/92


Executive Summary



o General Market and Technology Trends

o Functionality and Capabilities

o Vendor Landscape Drivers of Cost and Timeline



Appendix

Contents


28/92


Strategic Sourcing functional components available throughtechnology vendors can support most of the Air ForceStrategic Sourcing Model

Page 27


Opportunity

Assessment

Current

Strategy

Review

Market

Research

Sourcing

Strategy

Development

Requirements

Definition

Strategy

Execution

Performance

Management

Spend Analysis

E-Procurement

E-Sourcing

Contract Management

Supplier

Management

Supplier

Management

Demand

Management/Planning

Supply Market

Analysis

Strategic Sourcing Functional Components provided by TechnologyVendors

Not Available through Technology Vendors

There are no Strategic Sourcing technology tools that cover the end-to-end AF Strategic Sourcing Model, as no

functional components are available to fully support Supply Market Analysis and Demand Management/Planning

S l M k t A l i d D d M t/Pl i


29/92


Supply Market Analysis and Demand Management/Planningrequire a higher level of analysis and synthesis that must beconducted off tool

WHAT MAKES SUPPLY MARKET ANALYSIS AND DEMAND

MANAGEMENT/PLANNING DIFFERENT?

While many sourcing and procurement activitiesare repetitive and can be enabled through

technology, Demand Management and Planning

and Supply Market Analysis require a higher level

of analysis and synthesis and are mostly

conducted off tool


OpportunityAssessment

CurrentStrategyReview

MarketResearch

SourcingStrategy

Development

RequirementsDefinition

Strategy ExecutionPerformanceManagement

Spend Analysis

E-Procurement

E-Sourcing

Contract Management

Supplier

Management

Supplier

Management

Demand Management/Planning

Supply Market

Analysis

FunctionalComponentsprovidedbyTechnologyVendors

Not AvailablethroughTechnologyVendors

DEFINITION OF SUPPLY MARKET ANALYSIS AND

DEMAND MANAGEMENT/PLANNING

Supply Market Analysis - Developing an understanding ofthe supply market including market trends, segmentation,

cost drivers, etc. in order to identify commodity-specific

sourcing implications and opportunities

Demand Management/Planning - Managing demand for

supplies and services including planning/forecasting of

forward looking demand/requirements


30/92


Collect RawMarket Data

and Information

Extract KeySourcingInsights

Synthesize/Analyze

Insights andFindings

IdentifySourcing

Implicationsand

Opportunities

Page 29

Supply Market Analysis is conducted through off toolanalysis based on market data and information available

Supply Market Analysis goes beyond collection of market data and informationsignificant

synthesis and analysis of key insights is required to identify sourcing implications and

opportunities

SUPPLY MARKET ANALYSIS PROCESS

Identify market data and

information sources*

Collect data/information

across multiple sources

Identify relevant data and

information related to

sourcing of a specific

commodity/service across

all sources:o Market growth

o Market trends

o Market segmentation

o Value chains

o Cost drivers

o Etc.

Synthesize and analyze

key sourcing-related

findings and insights

identified in the market

data and information

sources

Identify the key

implications or so-whats

from the findings and

insights

Identify potential sourcing

opportunities based on

analysis

* A segmentation of market data and information sources and examples of each are provided in the Appendix

Off Tool Analysis

Si il l hil f ti l t id i t


31/92


Similarly, while some functional components can provide inputdata necessary for Demand Management and Planning, higherlevel off tool analysis is required

DEMAND MANAGEMENT/PLANNING

Demand Management and Planning is typically process-driven and requires a higher level

of analysis and synthesis to understand:

o Forward looking demand and requirements primarily through collaboration with internal stakeholders

o The trade-offs between cost and performance for different specifications of certain

commodities/services through detailed cost modeling

Some input data required for Demand Management and Planning is available through

technology components such as Spend Analysis (to understand historical spend patterns)and E-Procurement (real-time transactional data)

With the exception of ERP providers, the Strategic Sourcing technology vendors who are in

scope of this analysis typically do not provide Material Requirements Planning (MRP) tools

that enable manufacturing organizations to manage and plan for materials purchasing and

usage

The AF will need to rely on manual processes such as stakeholder collaboration and Office

productivity tools such as Microsoft Excel for the higher level analysis/synthesis required for

Demand Management and Planning


32/92


Spend Analysis components typically help organizations collectand analyze historical spend data

Page 31

CAPABILITIES

Data extraction and aggregation

Data cleansing and classification

Data enrichment and content (e.g., parentage, diversity,

risk, CSR)

Data analysis/Online Analytical Processing (OLAP)

Data reporting and dashboards

Strategy development and savings opportunity

identification

SPEND ANALYSIS CAPABILITIES



CurrentStrategy

Review

MarketResearch

SourcingStrategyDevelopment

Requirements

DefinitionStrategyExecution PerformanceManagement

Spend Analysis

E-Procurement

E-Sourcing

Contract Management

SupplierManagement

Supplier

Management


Supply

MarketAnalysis

FunctionalComponentsprovided byTechnologyVendors

Not Availablethrough TechnologyVendors

KEY BENEFITS

Provides visibility into spend across an organization through analytics, reporting, and dashboards

Classifies disparate spend data into meaningful categories of spend

Helps identify savings opportunities within an organization


33/92


E-Sourcing components typically enable eRFx, auctions,negotiations, and sourcing optimization

Page 32

CAPABILITIES

Supplier registration and management

Category and user workbench/portal

Knowledge management and templates/libraries

Document management and exchange (with suppliers)

RFx automation

Negotiation and event management (auctions, sealed-bid,

optimization)

Post-event analysis (cost breakdowns, total cost

calculations, post-bid optimization)

Contract award and integration

E-SOURCING CAPABILITIES



Current

StrategyReview

Market

ResearchSourcing

StrategyDevelopmentRequirements


Spend Analysis

E-Procurement

E-Sourcing

Contract Management

Supplier

Management

Supplier

Management


SupplyMarket

Analysis



KEY BENEFITS

Provides category-level management including visibility into all activities

Streamlines the bidding, negotiation and award phases of a procurement

Potentially reduces overall procurement costs by supporting various event formats such as auctions, etc.

Helps organizations identify ideal award scenarios based on uniquely defined criteria


34/92


E-Procurement components typically support the entireprocure to pay process

Page 33

CAPABILITIES

Supplier on-boarding and enablement

Catalog and content management

Search (catalog and non-catalog)

Requisitioning, PO and order management (including

workflow)

Document exchange and management

Invoice automation and supply chain finance

Services procurement

Analytics/reporting

E-PROCUREMENT CAPABILITIES



Current

StrategyReview

Market

ResearchSourcing



Spend Analysis

E-Procurement

E-Sourcing

Contract Management

Supplier

Management

Supplier

Management


SupplyMarket

Analysis



KEY BENEFITS

Through reducing maverick spending, often yields among the most rapid, tangible savings and cost avoidance

of any Strategic Sourcing functional component

Potentially reduces costs by reducing off-contract purchases, lowering purchase volume in general, improving

operating efficiency and increasing purchase order (PO) throughput per FTE

Enhances purchasing and payment controls and drive organization-wide and supplier compliance


35/92


Contract Management components typically support thecontract lifecycle from creation to close-out

Page 34

CAPABILITIES

Contract authoring

Full contract life-cycle desktop integration (Office, legal

platforms)

Workflow/management (e.g., clause libraries, scoring,

exception management)

Contract repository and search

Compliance management

Performance management (including reporting and

analytics)

CONTRACT MANAGEMENT CAPABILITIES



Current

StrategyReview

Market

ResearchSourcing



Spend Analysis

E-Procurement

E-Sourcing

Contract Management

Supplier

Management

Supplier

Management


SupplyMarket

Analysis



KEY BENEFITS

Provides visibility into the contract lifecycle beginning from contract development to close-out

Potentially reduces process-related costs by creating efficiencies

Supports compliance by storing templates, standard language, and contract clauses within libraries


36/92


37/92


Executive Summary



o General Market and Technology Trends

o Functionality and Capabilities

o

Vendor Landscape Drivers of Cost and Timeline



Appendix

Contents

To provide the defined functionality, the Strategic Sourcing


38/92


p y, g gtechnology vendor market consists of four distinct segmentsvarying by capability depth and customer focus


Definition: Vendors whoprovide a full suite ofStrategic Sourcingfunctionality (at least 4out of the 5 functional

components) withvarying levels ofcapabilities




Definition: Vendors whoprovide only targetedStrategic Sourcingfunctionality (at least 1out of the 5 functional



Examples:Zycus,Procurra

ERP VENDORS

Definition:EnterpriseResource Planning(ERP) vendors who canprovide at least basiccapabilities for most or

all of the StrategicSourcing functionalcomponents


Examples:SAP, Oracle,PeopleSoft


VENDORS

Definition:Vendors whofocus solely on providingfunctionality tailored toFederal-specificcontracting processes

with varying levels ofcapabilities



STRATEGIC SOURCING TECHNOLOGY MARKET SEGMENTS

Typically Provide Commercially-Focused Capabilities Provide Federally-Focused Capabilities

Can Provide BothCommercially-Focused and

Federally-Focused

Capabilities

Many Commercially-Focused Vendors are placing an emphasis on working with Federal clients and some are

considering developing Federally-focused capabilities within their tools

Strategic Sourcing Full Suite Vendors provide most or all


39/92


g g pfunctional components; however, their primary focus is on thecommercial sector

CHARACTERISTICS AND TRENDS

Most Strategic Sourcing Full Suite Vendors tend to be larger in size

and have a significant amount of mostly commercial experience

Suites typically consist of a set of integrated functional

components/modules with a common data set shared throughout;

however, all vendors surveyed can provide these

components/modules individually Some Strategic Sourcing Full Suite Vendors such as Ariba,

Emptoris, and Global eProcure have Federal experience (often

limited in scope)

However, the Strategic Sourcing Full Suite Vendors are placing a

heavy emphasis on moving into the Federal space and are

considering providing Federally-focused capabilities within their

tools

STRATEGIC SOURCING SUITE VENDORS

Strategic Sourcing Full Suite Vendors can potentially provide a broad range of functionality to the

AF in a single integrated package and many have market leading capabilities

Page 38


Definition: Vendors whoprovide a full suite ofStrategic Sourcingfunctionality (at least 4out of the 5 functional





40/92


Limited Suite/Point Solutions Vendors can provide onlyspecific functional components


Most Limited Suite/Point Solutions Vendors tend to be smaller in

size, potentially impacting their ability to maintain an installation

timeline and provide overall maintenance upkeep

While vendors mostly have commercial experience, some vendors

such as Zycus have Federal experience

Many vendors offer the strongest possible capabilities in their

targeted solution areas

LIMITED SUITE/POINT SOLUTIONS VENDORS

Limited Suite/Point Solution Vendors can provide overall solution depth in targeted areas;

however, they cannot support the end-to-end AF strategic sourcing model; the AF would require

integration of multiple tools to cover its model

Page 39


Definition: Vendors whoprovide only targetedStrategic Sourcingfunctionality (at least 1out of the 5 functionalcomponents) withvarying levels ofcapabilities


Examples: Zycus,Procurra

ERP Vendors can provide a full set of Strategic Sourcing


41/92


components including some that are Federally tailored;however, the depth of their capabilities varies


Vendors can provide a suite of components that cover all or most

aspects of Strategic Sourcing and can be integrated with other ERP

modules

ERP Vendors are large vendors with fairly significant market traction

in the commercial and government marketplaces with their full ERP

package

Functional components are typically integrated with a common data

set shared throughout; however, vendors can provide these

components/modules individually

Overall implementation costs are often significantly higher than

Strategic Sourcing Full Suite Vendors

SAP and Oracle can provide Federal versions of their commercially

focused suites

ERP VENDORS

ERP Vendors bring both Commercial and Federal experience and have broad coverage; however,

there are significant functional depth variations within their capabilities

Page 40

ERP VENDORS

Definition: EnterpriseResource Planning(ERP) vendors who canprovide at least basiccapabilities for most or allof the Strategic Sourcingfunctional components


Examples: SAP, Oracle,PeopleSoft

Federal Government-Specific Tool Vendors can address the


42/92


unique Federal contracting process; however, currently arelimited in the full range of capabilities


Vendors provide tools that address the uniqueness of Federal

contracting including processes, regulations (FAR, DFARS, etc.),

and document structure (RFP documents, etc.)

Vendors only support public sector organizations (Federal, State,

and Local) and related organizations (Aerospace and Defense)

Currently, Federally-focused solutions generally do not provide thefull level of capabilities that can be provided by commercially-

focused vendors; how ever, vendor s are beginnin g to bui ld out

their capabi l i t ies, specif ically within analyt ics and r eport ing

Federal Government-Specific Tool Vendors often team with

commercial tool vendors to close the gap on

functionality/capabilities

FEDERAL GOVERNMENT-SPECIFIC TOOL VENDORS

Federal Government-Specific Tool Vendors have tailored solutions for the Federal acquisition

processes; however, they do not generally provide the full range of functional component

capabilities available through commercially-focused vendors

Page 41


VENDORS

Definition: Vendors whofocus solely on providingfunctionality tailored toFederal-specificcontracting processeswith varying levels ofcapabilities



Of h 12 S i S i F ll S i d ERP d l


43/92


Vendor Name Spend Analysis E-Procurement E-SourcingContract

Management

Supplier

Management

AECSoft X X X X

Ariba X X X X X

Emptoris X X X X

Global eProcure X X X X X

Oracle (ERP) X X X X X

SAP (ERP) X X X X X

Basware X X X X X

BravoSolution X X X X

Iasta X X X X

Ketera X X X X X

PeopleSoft (ERP)* X X X X X

PerfectCommerce X X X X X

NO

IDENTIFIED

FEDER

ALEXPERIENCE

IDENTIFIEDFEDERAL

EXPERIENCE

Page 42

STRATEGIC SOURCING SUITE/ERP VENDOR LANDSCAPE

BREADTH OF OFFERING

Of the 12 Strategic Sourcing Full Suite and ERP vendors, only6 have identified Federal experience

* PeopleSoft is owned by Oracle

A high level comparative analysis of these vendors has been included in the Appendix

Federal Government-Specific Vendors have primarily focusedC t t M t h th b ildi t


44/92


on Contract Management; however, they are building outbroader capabilities

FEDERAL GOVERNMENT-SPECIFIC TOOL VENDORS LANDSCAPE

BREADTH OF OFFERING

A high level comparative analysis of these vendors has been included in the Appendix; in addition, a

list of the 57 identified Limited Suite/Point Solution Vendors has been included in the Appendix

Vendor NameSpend

Analysis

E-

ProcurementE-Sourcing

Contract

Management

Supplier

Management

CACI X

Compusearch X

Distributed

SolutionsX


45/92


Executive Summary






Appendix

Contents

In addition to vendors and capabilities, there are a number ofother major drivers that can affect the cost and time required


46/92


other major drivers that can affect the cost and time requiredfor the AF to implement Strategic Sourcing technology tools

DRIVERS OF COST/TIMELINE DESCRIPTION

Vendor(s) Selected/Functional

Components (Tools) Implemented

The type of vendor(s) selected and number and types of functional components that

will be implemented

Implementation Scale/ApproachThe scale (# of users, # of organizations, etc.) and roll-out approach (phased vs. non-

phased, timing, etc.) for implementing tools in the AF environment

Amount of Data/Content RequiredThe amount of internal (e.g., spend data, specification level, etc.) and external (e.g., #

of suppliers, # of catalogs, # of catalog items, etc.) data and content required

Customization vs. ConfigurationRequired

The amount of customization (changes to code) versus configuration (changes tobusiness rules without changing code) needed to meet AF requirements

Deployment/Hosting Model The deployment hosting model required by the AF

License Model The license model used by the AF (lease vs. buy)

Integration with Current Systems

Required

The number of touch points and complexity of integration required to connect to

current AF systems

Security The ability for tools to adhere to AF security requirements

Training Required The amount of training required for users to utilize the tools

Page 45

COSTS/TIMELINE DRIVERS AND DESCRIPTION

Within each driver there are a number of specific


47/92


Within each driver, there are a number of specificconsiderations for the AF that can drive cost and timeline

DRIVER CONSIDERATIONS FOR THE AFVendor(s)Selected and

Functional Components

Implemented

Type of vendor(s) selected: Strategic Sourcing Full Suite Vendor, ERP

Vendor, Federal Government-specific Tool Vendor, and/or Limited

Suite/Point Solution Vendors

Number and types of functional components (spend analysis, etc.) that

will be implemented (Note: some functional components such as E-

Sourcing are more standalone and do not require integration)

ImplementationScale/Approach

Number of end users who will be using the tool

Number of organizations (offices, MAJCOMs, etc.) with unique

processes/requirements that will be using the tool

Phased rollout vs. Full rollout based on:

oFunctionalityo # of end users

oDepth of internal information/processes

Amount of Data/Content

Required

Amount of internal information and content required to meet AF

requirements and needs (e.g., spend data, etc.)

Amount of external information and content required to meet AF

requirements and needs (e.g., # of suppliers, # of catalogs, # of catalog

items, etc.)

Page 46

CONSIDERATIONS THAT AFFECT COST/TIMELINE DRIVERS (PAGE 1 OF 3)



48/92


DRIVER CONSIDERATIONS FOR THE AF

Customization vs.

Configuration RequiredAmount of customization (changes to code) that is required to meet AF-

specific requirements and processes

Amount of configuration (changes to business rules, basic look and feel, etc.

without changing code) that is required to meet AF-specific requirements and

processes

Amount of configuration that can be done by AF end users after sufficient

training versus configuration that must be done by the vendor implementationteam

Deployment/Hosting

Model Deployment/hosting model used:

oMulti-tenant Software as a Service (SaaS) or Cloudo Single tenant on demand (hosted by vendor or 3 rdparty partner)

o License with 3rdparty hosting

o Hosted behind the AF firewall

License Model

Options available foro Lease licenses with maintenance updates only

o Lease licenses with both maintenance and upgrades included

o Lease licenses with additional value-added content included

oBuy licenses (perpetual) with options to purchase maintenance and upgrades

Page 47


Within each driver, there are a number of specificconsiderations for the AF that can drive cost and timeline (cont)



49/92


DRIVER CONSIDERATIONS FOR THE AFIntegration with Current Systems

Required Previous vendor experience with integration to Federal, DoD, and/or

AF-specific systems

Number of touch points required with existing AF systems such as

SPS, AFWay, ConWrite, data repositories, etc.

Availability of pre-built interfaces from vendors with SPS, Federal

systems, ERP systems, etc. that can be leveraged during an

implementation

Availability of integration methods/technologies such as XML, web

services, etc. from vendors that can be used for integration and data

transfer

Security Ability of the vendors to meet AF security requirementsoDo the vendors have to go through AF-specific security certification

processes?

oDo the vendors have existing security certifications that meet AFrequirements?

Training Required Amount of training required by AF staff to use a) basic capabilities

resident in the tools once implementation has taken place and b)

advanced and power user capabilities


Within each driver, there are a number of specificconsiderations for the AF that can drive cost and timeline (cont)

Page 48


50/92


Executive Summary





Options Available for the AF Appendix

Contents

As next steps, the AF should focus on understanding its high-level needs and requirements and collecting additional


51/92


level needs and requirements and collecting additionalinformation prior to an acquisition decision

HIGH-LEVEL NEXT STEPS

1 Communicate and brief assessment internally to AF stakeholders

2 Reach out to other DoD organizations that have implemented Strategic Sourcing

technology tools to discuss lessons learned, implementation successes and

challenges, and overall experience*

3 Develop an understanding of high-level needs and requirements

4 Develop and send out a Request For Information (RFI) to collect more detailedinformation from vendors around capabilities, costs, etc. aligned with the high-level

needs and requirements

5 Develop a business case to evaluate the effectiveness of Strategic Sourcing

solutions based on an understanding of total costs and calculation of a Return on

Investment (ROI)

6 Decide whether to move forward with an acquisition of Strategic Sourcingtechnology tools

Page 50

* Reference slides 77-79 in the Appendix for examples of implementations within the DoD and Points of Contact

information

The AF should immediately understand its high level needsand requirements to drive the rest of the Strategic Sourcing


52/92


and requirements to drive the rest of the Strategic Sourcingtechnology assessment

UNDERSTAND HIGH-LEVEL NEEDS AND REQUIREMENTS

The AF should move forward with understanding its needs and requirements at a

high level, including:

oFunctionality/capabilities: Prioritized list of functionality and high level capabilities

based on needs and funding availability

oProcesses: High level AF acquisition and sourcing processes

oScale: The organizations and # of users that may potentially use the sourcing tools

oSecurity: Security requirements and certifications that may be required for the

sourcing tools to fit into the AF environment

oDeployment/Hosting Model: Potential deployment/hosting models that the AF

would consider

Page 51

A Request For Information (RFI) will help the AF develop amore detailed understanding of the market required to move


53/92


g qtowards an acquisition decision

This assessment only provides the AF with the foundational knowledge

necessary to further engage with vendorsa deeper understanding of

their tools, specific capabilities, and costs is required prior to a future

acquisition

A detailed RFI can be sent out by the AF to the vendor community prior

to a formal acquisition of sourcing tools to understand the sourcing

tools and capabilities in greater detail based on high level AFrequirements

REQUEST FOR INFORMATION (RFI) OBJECTIVES

Page 52


54/92


The RFI should address a number of key topics and questions

TOPIC SUB-TOPICS/QUESTIONS

Understand vendor capabilities in

detail and relative to AF needs

and requirements

What functional components can the vendor provide based on AF

needs/requirements?

What capabilities and detailed sub-capabilities within each functional component

can the vendor provide based on AF needs/requirements?

What are the trends in the vendor marketplace? What capabilities is the vendor

building out in the future that will help it meet AF needs/requirements?

How does each vendor tool address specific AF business process scenarios?

Understand DoD/Federal

experience in detail

What DoD/Federal agencies has the vendor implemented its Strategic Sourcing

tools in? Which specific organizations/offices?

Which functional components and capabilities have been implemented by the

vendor within each DoD/Federal agency?

What was the scale of each implementation (# of organizations/offices, # of users,

# of integration points, etc.)?

Which DoD/Federal systems were the tools integrated with during eachimplementation?

What were the implementation challenges that were faced and overcome and

lessons learned that could be applied to an AF implementation?

SAMPLE RFI TOPICS (PAGE 1 OF 2)

Page 53

The RFI should address a number of key topics and questions


55/92


y p q(cont)

TOPIC SUB-TOPICS/QUESTIONS

Understand potential

implementation timeline in detail

Based on high level AF needs/requirements, what is the anticipated timeline for

implementing tools within the AF environment?

Understand integration

capabilities with AF systems in

detail

Does the vendor have a detailed understanding of AF-specific systems?

What level of customization vs. configuration may be required based on high-level

AF needs/requirements?

What integration tools/techniques/methods can the vendor leverage to limit thetime and costs associated with integration to AF systems?

What deployment/hosting models can the vendor support?

Understand costs in detail What licensing/pricing models does the vendor support?

What are the Rough Order of Magnitude (ROM) costs for each functional

component that can be provided based on high level AF needs/requirements?

SAMPLE RFI TOPICS (PAGE 2 OF 2)

Page 54

Following an RFI, the AF business case will evaluate an


56/92


investment in Strategic Sourcing tools

Page 55

SAMPLE BUSINESS CASE TOPICS Highlight and prioritize AF needs, including which functionality is required and when,

based on a high level understanding of requirements and processes and RFI responses

(detailed understanding of the market, vendors, and capabilities)

Examine and quantify trade-offs based on the different types of solutions (e.g., implement

full suite all at once vs. implement individual functional components as needed, etc.) and

various deployment/hosting modelsUnderstand potential savings/cost avoidance that can be achieved

Outline potential total costs based on RFI responses and drivers of cost/timeline including

software (e.g., tools, database, etc.), implementation, hosting, etc.

Make a justification of needs by calculating an Return On Investment (ROI)

Based on the business case, the AF should be able to decide on moving forward with

an acquisition of Strategic Sourcing tools

C t t


57/92


Executive Summary Introduction and Background




Options Available for the AF Appendix

Contents

The AF has a number of options to consider for the StrategicSourcing tools it wants to implement and how they ared l d


58/92


deployed

Page 57

OPTION AREA DESCRIPTION

Vendor/Tool OptionsVendor and tool options available for the Air Force to

address almost all steps of its Strategic Sourcing Model

Deployment Model OptionsDeployment model options available for the Air Force to

deploy Strategic Sourcing tools to its users

License Model OptionsLicense model options available for the Air Force toacquire licenses of Strategic Sourcing tools for its users

There are a number of other decisions for the Air Force to make regarding Strategic

Sourcing tools based on its specific needs/requirementsthe following slides provide

options available for the Air Force in several key areas

OPTIONS FOR THE AIR FORCE TO CONSIDER

The AF has to decide the level of coverage it wants beforel ti ifi St t i S i d d t l


59/92


selecting specific Strategic Sourcing vendors and tools

Page 58

Pros: Cover almost all aspects of the AF sourcing model and meet most ofthe AF needs; can acquire a full integrated suite upfront; greaternegotiating leverage with vendors

Cons: Some functionality may not be used right away or at all

Scenario 1: Cover AlmostAll Steps of the AF

Sourcing Model

Pros: Allows the AF to prioritize its needs and invest in those tools that aremost critical upfront, allowing for a phased integration of StrategicSourcing tools

Cons: Additional needs identified at a future point must be met by eitherinvesting in the remaining components from a full suite vendor orintegrating with tools from other vendors; will continue to require mostly

manual processes/existing tools to cover the remaining steps of the AFsourcing model

Scenario 2: Cover One orSome Steps of the AF

Sourcing Model Based onPrioritization

The following slides lay out the vendor/tool options for Scenario 1

SCENARIOS FOR VENDOR/TOOL OPTIONS

While no single vendor can meet all of the AF needs, the AFhas many options to consider when choosing StrategicSourcing vendors to cover most of its sourcing model


60/92


Sourcing vendors to cover most of its sourcing model

VENDOR/TOOL

OPTION DESCRIPTION PROS CONS

Full Suite from

Strategic

Sourcing Full

Suite Vendor

Choose all functional

components from a

Strategic Sourcing Full

Suite Vendor

Provides all functional components

in a single integrated suite

Many vendors have market leading

capabilities

May provide a fully integrated data

model that can directly share and

integrate data across functionalcomponents (dependent on specific

vendors)

Currently, functional components

are primarily based on commercial

procurement processes

Overall vendor federal experience

is limited (implementation

experience with the full suite is

almost non-existent)

Full Suite from

ERP Vendor


components from an

ERP Vendor

ERP Vendors such as Oracle and

SAP provide Federally-focused

solutions and have experience

implementing them within DoD

(Oracle has implemented within the

AF)

Provides all functional components

in a single integrated suite

May provide a fully integrated data

model that can shared across

functional components (dependent

on specific vendor)

There are significant comparative

functional depth variations within

their capabilities and the individual

modules

Overall implementation costs are

often significantly higher than

Strategic Sourcing Full Suite

Vendors

SCENARIO 1 VENDOR/TOOL OPTIONS (PAGE 1 OF 2)

Page 59

While no single vendor can meet all of the AF needs, the AFhas many options to consider when choosing StrategicSourcing vendors to cover most of its sourcing model (cont)


61/92


Sourcing vendors to cover most of its sourcing model (cont)

VENDOR/TOOLOPTION

DESCRIPTION PROS CONS

Suite from Federal

Government-

specific Tool

Vendor Integrated

With Additional

Capabilities


components from a Federal

Government-specific Tool

Vendor and supplement with

additional capabilities available

from commercially-focused

vendors as necessary

Vendors can provide Federally-

tailored solutions and have

experience implementing them

within DoD

Capability limitations in the

Federal Government-Specific

Tools can be supplemented bytools from commercially-focused

vendors (e.g., Auctions, Spend

Analysis, etc.)

Requires integration between

Federal Government-specific

Tools and other

commercially-focused tools

May lack a common data

model across components

Lack of key enabling

functionality in specific areas

Integrated Suite of

Individual

Functional

Components from

Multiple Vendors

Choose select functional

components from Strategic

Sourcing Full Suite Vendors,

ERP Vendors, Federal

Government-specific Vendors,

and/or Limited Suite/PointSolution Vendor and integrate

Allows the AF to choose best-in-

class functional components from

multiple vendors

Requires integration between

functional components

Lacks a common data model

across components

Not one throat to choke inthe event of technology

problems

SCENARIO 1 VENDOR/TOOL OPTIONS (PAGE 2 OF 2)

Page 60

Furthermore, there are a number of advantages anddisadvantages for each tool deployment model option that theAF must consider


62/92


AF must consider

DEPLOYMENTMODEL


Multi-tenant Software

as a Service (SaaS) or

Cloud

Model of deployment where the

vendor leases a complete

capability on a per-seat basis

(not per server or another

measure) for the tool to the AF

for use as a service on demand

with other customers

No investment in

technology infrastructure

required from the AF

Tool is maintained and

upgraded as needed by

the vendorvalued-added

content also often included Tools are accessible

anywhere within the AF

Most prescribe to SAS-70

security audit standards

May not meet AF-specific

security requirements

Multi-customer technology

stack - shared platform for

tools and data across

organizations

Single tenant on

demand (hosted by

vendor or 3rdparty

partner)


AF purchases or leases licenses

and the vendor (or partner)

hosts a specific instance onbehalf of the AF

No investment in


required from the AF

The AF does not share the

tool with other customers





Potential costs incurred forsoftware maintenance and

upgrades

Data resides on vendor

infrastructure

DEPLOYMENT/HOSTING MODEL OPTIONS (PAGE 1 OF 2)

Page 61

Furthermore, there are a number of advantages anddisadvantages for each tool deployment model that the AFmust consider (cont)


63/92


must consider (cont)

DEPLOYMENTMODEL


License with 3rdparty

hosting


AF purchases or leases

licenses and a 3rdparty vendor

hosts an instance on behalf of

the AF

No investment in


The AF does not share

the tool with other

customers


security auditingstandards



Potential costs incurred for

software maintenance and

upgrades

Data resides on 3rdparty

hosting vendor infrastructure

Value-added content is not

provided by tool vendor

Hosted behind the AF

firewall


AF purchases (common) or

leases (uncommon, under this

approach) licenses and hosts

the tool in its own environment

Meets AF security

requirements

AF has control over the

tool and technology

infrastructure Greater customization

capability over other

models

AF is responsible for

maintenance and upkeep of


(servers, etc.)

Potential costs incurred forsoftware maintenance and

upgrades

Value-added content is not

provided by tool vendor

DEPLOYMENT/HOSTING MODEL OPTIONS (PAGE 2 OF 2)

Page 62

In addition, there are a number of License Model optionsavailable for the AF to consider


64/92


available for the AF to consider

LICENSE MODEL OPTIONS

Page 63

LICENSE MODEL OPTION DESCRIPTION

TYPICAL DEPLOYMENT

MODEL*

Buy Licenses (Perpetual)

with options to purchase

maintenance and upgrades

AF purchases the right to use a set of tool

licenses for an indefinite period of time

and has the option to purchase maintenance

and upgrades for a period of time

Hosted behind the AF firewall

Lease Licenses with

maintenance updates only


licenses for a limited period of time and

only receives routine software maintenanceupdates

Hosted behind the AF firewall or

License with 3rdparty hosting

Lease Licenses with both

maintenance and upgrades

included


licenses for a limited period of time and

has the right to upgrade to newer versions

that are released during the lease period

Multi-tenant Software as a Service

(SaaS) or Cloud

Lease Licenses with value

added content


licenses for a limited period of time, hasthe right to upgrade to newer versions that

are released during the lease period, and

has value added content (e.g., detailed

supplier information such as diversity etc.)

Multi-tenant Software as a Service

(SaaS) or Cloud

NOTE: The Deployment Model(s) shown is the model typically associated with each License Model; however, each License Model is

not limited to the Deployment Model(s) indicated; not every vendor provides each of the license models listed above


65/92

The team used a 4 step process to conduct the StrategicSourcing technology research and analysis


66/92


IdentifyVendor

Landscape

ConductComparative

Analysis

Identify KeyTakeawaysand Next

Steps

Page 65

g gy y

STRATEGIC SOURCING TECHNOLOGY RESEARCH AND

ANALYSIS METHODOLOGY

Research and identify basic

market trends

Research and identify

market segments

Identify functional

components and key

capabilities available in the

marketplace

Setup and conduct vendor

presentations and demos

Identify landscape of

Strategic Sourcing

technology vendors

Identify those

vendors with Federal

government

experience

Identify select vendors

for detailed

comparative analysis

Identify criteria for

detailed comparative

analysis of select

vendors

Identify vendor

strengths and

weaknesses

Compare vendors

Summarize key takeaways

for the AF

Identify next steps and

provide follow up guidance

on an RFI and business

case

Conduct Market Research

The team leveraged a number of information sources for itsresearch and analysis


67/92


y

SOURCE DESCRIPTION

Industry Analysts

Subject Matter Experts (SMEs) with a deep

understanding of the Strategic Sourcing technology

market

Vendor Websites and BrochuresWebsites, product brochures, and marketing materials

available from vendors

Vendor Presentations/DemosIn person or web conference-based presentations/demos

for a subset of vendors

Market Research ReportsResearch reports from Gartner, AMR, Forrester, IDC, and

other research sites

INFORMATION SOURCES

Contents


68/92


Executive Summary


Methodology





Appendix

o Methodology

o Market Data and Information Providers

o Limited Suite/Point Solution Vendors

o Vendor Comparative Analysiso DoD Implementation Examples

Market data and information providers can be segmented into5 primary areas of focus; however, many vendors provideresearch across multiple segments


69/92


Supply Market Research can also be found through trade publications, blogs and

industry associations

Industry-Focused Market

Research

US Market Research

pertaining to a specificindustry including major

players, key statistics, andindustry trends

Forrester

Gartner

Yankee Group

AMR

Cross-IndustryMarket

Research

Market Research, facts

and trends on a broaderscale possibly with aglobal perspective

focusing on multiplerelated industries

IBISWorld

PIU

Frost & Sullivan

CompanyProfile and RiskAssessments

Research on specificcompanies usually

includes a profile of thecompany, financial

statements, outlooks, andrisk assessments

Duns & Bradstreet

Thomson

Hoovers

I-Bank

General Industry researchwith particular emphasison industry and companyeconomics and financials

Goldman Sachs

JP Morgan

Scotia Bank

MARKET DATA AND INFORMATION PROVIDER SEGMENTS

Segment

Definitio

n

Provider

Exa

mples

Contents


70/92


Executive Summary


Methodology





Appendix

o Methodology



o

Vendor Comparative Analysiso DoD Implementation Examples

15 Limited Suite/Point Solution Vendors with some Federalexperience have been identified that are capable of providingat least one of the five functional components


71/92


Vendor Name Spend Analysis E-Procurement E-Sourcing ContractManagement

SupplierManagement

Aravo X

Bellwether X

CombineNet X X

CVM Solutions X X

D&B X X

Endeca X

ePlus X

Experian/Equifax X

Infor X X

JD Edwards X

Siemens

SAS/DataFlux X

VenDigital X X X

Versata/Nextance X

Zycus X X X

Page 70

LIMITED SUITE/POINT SOLUTION VENDOR LANDSCAPE

WITH VERIFIED FEDERAL EXPERIENCE

VERIFIEDFEDERALEXP

ERIENCE


72/92

In addition, many other Limited Suite/Point Solution Vendorswithout Federal experience exist and are capable of providingat least one of the five functional components (cont.)


73/92



SupplierManagement

Birchstreet X

BIQ * X X

Browz X

CoExprise X X X

Coupa Software X X

eBreviate X X X

EC Sourcing Group X X

Elcom X X X

Enporion X X

Epiqtech X X X

FullStep X X

HedgeHog X X X

IonWave X X X

JVKelly X X X

MetricStream X X

Page 72

LIMITED SUITE/POINT SOLUTION VENDOR LANDSCAPE -

WITH NO VERIFIED FEDERAL EXPERIENCE (PAGE 2 OF 3)

NO

VERIFIEDFEDERALEXPERIENCE

In addition, many other Limited Suite/Point Solution Vendorswithout Federal experience exist and are capable of providingat least one of the five functional components (cont.)


74/92



SupplierManagement

Portum X X X

Procurra Sourcing X X

PurchasingNet X X X

Scanmarket X X

SciQuest X X X

Software Solutions

(SSI)X

Symphony Spend

Management

Solutions

X X X

Synertrade X X X

Quadrem X X

Upside Software X

Source One

(WhyAbe)X X X

Xcitec * X

Page 73

There are 100s of other Limited Suite/Point Solutions also available in the marketplace

NO

VERIFIEDFEDERAL

EXPERIENCE

LIMITED SUITE/POINT SOLUTION VENDOR LANDSCAPE -

WITH NO VERIFIED FEDERAL EXPERIENCE (PAGE 3 OF 3)

Contents


75/92


Executive Summary


Methodology





Appendix

o Methodology



o

Vendor Comparative Analysiso DoD Implementation Examples

The team conducted separate vendor comparative analysesfor Strategic Sourcing Full Suite/ERP Vendors and FederalGovernment-Specific Tool Vendors


76/92


VENDORS FOR COMPARATIVE ANALYSES

Strategic Sourcing Full Suite/ERP VendorsAll identified vendors selected (vendorscapable of providing at least 4 of the 5 functional components):

oAriba

Strategic Sourcing Tools Analysis Final Report_FINAL_111209 AF Version

Documents

Transcript of Strategic Sourcing Tools Analysis Final Report_FINAL_111209 AF Version