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8/12/2019 Strategic Sourcing Tools Analysis Final Report_FINAL_111209 AF Version
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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
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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
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Strategic Sourcing Tools AnalysisPage 2
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
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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
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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
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Strategic Sourcing Tools Analysis
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
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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
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Key TakeawayStrategic Sourcing Market Growth
Page 7
KEY TAKEAWAY/FINDING DETAILS IMPLICATIONS TO THE AF
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
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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
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Key TakeawaysVendor Landscape
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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
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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
Identified Vendors: 57
Examples:Zycus,Procurra
ERP VENDORS
Definition:EnterpriseResource Planning(ERP) vendors who canprovide at least basic
capabilities for most orall of the StrategicSourcing functionalcomponents
Identified Vendors: 3
Examples:SAP, Oracle,PeopleSoft
FEDERALGOVERNMENT-SPECIFIC TOOL
VENDORS
Definition:Vendors whofocus solely on providingfunctionality tailored toFederal-specific
contracting processeswith varying levels ofcapabilities
Identified Vendors: 3
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
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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
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COSTS/TIMELINE DRIVERS AND DESCRIPTION
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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
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Executive Summary
Introduction and Background
Technology Marketplace
Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
Options Available for the AF
Appendix
Contents
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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
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The Air Force has developed an iterative Strategic SourcingModel that is currently supported by various manual processsteps
AIR FORCE STRATEGIC SOURCING MODEL
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)
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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
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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
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Executive Summary
Introduction and Background
Technology Marketplace
General Market and Technology Trends
Functionality and Capabilities
Vendor Landscape Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
Options Available for the AF
Appendix
Contents
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Key Takeaways
Page 19
KEY TAKEAWAY/FINDING DETAILS IMPLICATIONS TO THE AF
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)
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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)
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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
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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
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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
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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
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Executive Summary
Introduction and Background
Technology Marketplace
o General Market and Technology Trends
o Functionality and Capabilities
o Vendor Landscape Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
Options Available for the AF
Appendix
Contents
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Strategic Sourcing functional components available throughtechnology vendors can support most of the Air ForceStrategic Sourcing Model
Page 27
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
S l M k t A l i d D d M t/Pl i
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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
AIR FORCE STRATEGIC SOURCING MODEL
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
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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
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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
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Spend Analysis components typically help organizations collectand analyze historical spend data
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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
AIR FORCE STRATEGIC SOURCING MODEL
OpportunityAssessment
CurrentStrategy
Review
MarketResearch
SourcingStrategyDevelopment
Requirements
DefinitionStrategyExecution PerformanceManagement
Spend Analysis
E-Procurement
E-Sourcing
Contract Management
SupplierManagement
Supplier
Management
Demand Management/Planning
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
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E-Sourcing components typically enable eRFx, auctions,negotiations, and sourcing optimization
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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
AIR FORCE STRATEGIC SOURCING MODEL
OpportunityAssessment
Current
StrategyReview
Market
ResearchSourcing
StrategyDevelopmentRequirements
DefinitionStrategyExecution PerformanceManagement
Spend Analysis
E-Procurement
E-Sourcing
Contract Management
Supplier
Management
Supplier
Management
Demand Management/Planning
SupplyMarket
Analysis
FunctionalComponentsprovided byTechnologyVendors
Not Availablethrough TechnologyVendors
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
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E-Procurement components typically support the entireprocure to pay process
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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
AIR FORCE STRATEGIC SOURCING MODEL
OpportunityAssessment
Current
StrategyReview
Market
ResearchSourcing
StrategyDevelopmentRequirements
DefinitionStrategyExecution PerformanceManagement
Spend Analysis
E-Procurement
E-Sourcing
Contract Management
Supplier
Management
Supplier
Management
Demand Management/Planning
SupplyMarket
Analysis
FunctionalComponentsprovided byTechnologyVendors
Not Availablethrough TechnologyVendors
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
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Contract Management components typically support thecontract lifecycle from creation to close-out
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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
AIR FORCE STRATEGIC SOURCING MODEL
OpportunityAssessment
Current
StrategyReview
Market
ResearchSourcing
StrategyDevelopmentRequirements
DefinitionStrategyExecution PerformanceManagement
Spend Analysis
E-Procurement
E-Sourcing
Contract Management
Supplier
Management
Supplier
Management
Demand Management/Planning
SupplyMarket
Analysis
FunctionalComponentsprovided byTechnologyVendors
Not Availablethrough TechnologyVendors
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
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Executive Summary
Introduction and Background
Technology Marketplace
o General Market and Technology Trends
o Functionality and Capabilities
o
Vendor Landscape Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
Options Available for the AF
Appendix
Contents
To provide the defined functionality, the Strategic Sourcing
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p y, g gtechnology 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 4out of the 5 functional
components) withvarying levels ofcapabilities
Identified Vendors: 9
Examples:Ariba,Emptoris, GlobaleProcure
LIMITED SUITE/POINTSOLUTION VENDORS
Definition: Vendors whoprovide only targetedStrategic Sourcingfunctionality (at least 1out of the 5 functional
components) withvarying levels ofcapabilities
Identified Vendors: 57
Examples:Zycus,Procurra
ERP VENDORS
Definition:EnterpriseResource Planning(ERP) vendors who canprovide at least basiccapabilities for most or
all of the StrategicSourcing functionalcomponents
Identified Vendors: 3
Examples:SAP, Oracle,PeopleSoft
FEDERALGOVERNMENT-SPECIFIC TOOL
VENDORS
Definition:Vendors whofocus solely on providingfunctionality tailored toFederal-specificcontracting processes
with varying levels ofcapabilities
Identified Vendors: 3
Examples:Compusearch,Distributed Solutions
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
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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
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STRATEGICSOURCING FULLSUITE VENDORS
Definition: Vendors whoprovide a full suite ofStrategic Sourcingfunctionality (at least 4out of the 5 functional
components) withvarying levels ofcapabilities
Identified Vendors: 9
Examples:Ariba,Emptoris, GlobaleProcure
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Limited Suite/Point Solutions Vendors can provide onlyspecific functional components
CHARACTERISTICS AND TRENDS
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
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LIMITED SUITE/POINTSOLUTION VENDORS
Definition: Vendors whoprovide only targetedStrategic Sourcingfunctionality (at least 1out of the 5 functionalcomponents) withvarying levels ofcapabilities
Identified Vendors: 57
Examples: Zycus,Procurra
ERP Vendors can provide a full set of Strategic Sourcing
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components including some that are Federally tailored;however, the depth of their capabilities varies
CHARACTERISTICS AND TRENDS
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
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ERP VENDORS
Definition: EnterpriseResource Planning(ERP) vendors who canprovide at least basiccapabilities for most or allof the Strategic Sourcingfunctional components
Identified Vendors: 3
Examples: SAP, Oracle,PeopleSoft
Federal Government-Specific Tool Vendors can address the
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unique Federal contracting process; however, currently arelimited in the full range of capabilities
CHARACTERISTICS AND TRENDS
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
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FEDERALGOVERNMENT-SPECIFIC TOOL
VENDORS
Definition: Vendors whofocus solely on providingfunctionality tailored toFederal-specificcontracting processeswith varying levels ofcapabilities
Identified Vendors: 3
Examples:Compusearch,Distributed Solutions
Of h 12 S i S i F ll S i d ERP d l
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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
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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
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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
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Executive Summary
Introduction and Background
Technology Marketplace
Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
Options Available for the AF
Appendix
Contents
In addition to vendors and capabilities, there are a number ofother major drivers that can affect the cost and time required
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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
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COSTS/TIMELINE DRIVERS AND DESCRIPTION
Within each driver there are a number of specific
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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.)
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CONSIDERATIONS THAT AFFECT COST/TIMELINE DRIVERS (PAGE 1 OF 3)
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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
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CONSIDERATIONS THAT AFFECT COST/TIMELINE DRIVERS (PAGE 2 OF 3)
Within each driver, there are a number of specificconsiderations for the AF that can drive cost and timeline (cont)
Within each driver there are a number of specific
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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
CONSIDERATIONS THAT AFFECT COST/TIMELINE DRIVERS (PAGE 3 OF 3)
Within each driver, there are a number of specificconsiderations for the AF that can drive cost and timeline (cont)
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Executive Summary
Introduction and Background
Technology Marketplace
Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
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
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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
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* 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
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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
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A Request For Information (RFI) will help the AF develop amore detailed understanding of the market required to move
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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
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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)
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The RFI should address a number of key topics and questions
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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)
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Following an RFI, the AF business case will evaluate an
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investment in Strategic Sourcing tools
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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
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Executive Summary Introduction and Background
Technology Marketplace
Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
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
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deployed
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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
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selecting specific Strategic Sourcing vendors and tools
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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
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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
Choose all functional
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)
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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)
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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
Choose all functional
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)
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AF must consider
DEPLOYMENTMODEL
DESCRIPTION PROS CONS
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)
Model of deployment where the
AF purchases or leases licenses
and the vendor (or partner)
hosts a specific instance onbehalf of the AF
No investment in
technology infrastructure
required from the AF
The AF does not share the
tool with other customers
Most prescribe to SAS-70
security requirements
May not meet AF-specific
security requirements
Potential costs incurred forsoftware maintenance and
upgrades
Data resides on vendor
infrastructure
DEPLOYMENT/HOSTING MODEL OPTIONS (PAGE 1 OF 2)
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must consider (cont)
DEPLOYMENTMODEL
DESCRIPTION PROS CONS
License with 3rdparty
hosting
Model of deployment where the
AF purchases or leases
licenses and a 3rdparty vendor
hosts an instance on behalf of
the AF
No investment in
technology infrastructure
The AF does not share
the tool with other
customers
Most prescribe to SAS-70
security auditingstandards
May not meet AF-specific
security requirements
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
Model of deployment where the
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
technology infrastructure
(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)
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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
AF purchases the right to use a set of tool
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
AF purchases the right to use a set of tool
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
AF purchases the right to use a set of tool
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
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The team used a 4 step process to conduct the StrategicSourcing technology research and analysis
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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
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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
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Executive Summary
Introduction and Background
Methodology
Technology Marketplace
Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
Options Available for the AF
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
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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
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Executive Summary
Introduction and Background
Methodology
Technology Marketplace
Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
Options Available for the AF
Appendix
o Methodology
o Market Data and Information Providers
o Limited Suite/Point Solution Vendors
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
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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
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LIMITED SUITE/POINT SOLUTION VENDOR LANDSCAPE
WITH VERIFIED FEDERAL EXPERIENCE
VERIFIEDFEDERALEXP
ERIENCE
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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.)
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Vendor Name Spend Analysis E-Procurement E-Sourcing ContractManagement
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.)
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Vendor Name Spend Analysis E-Procurement E-Sourcing ContractManagement
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
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Executive Summary
Introduction and Background
Methodology
Technology Marketplace
Drivers of Cost and Timeline
Next Steps/Follow-on Guidance
Options Available for the AF
Appendix
o Methodology
o Market Data and Information Providers
o Limited Suite/Point Solution Vendors
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
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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