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| Best Value Sourcing |
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Introduction
In best value sourcing, whether selecting a proposal, browsing a catalog, issuing a reverse auction or selecting the best solution to address your organization's procurement needs, making the right choice is paramount. A sub-optimal selection is associated with significant hidden costs. The problem is amplified by the lack of symptoms. Since no one purposely selects a second tier solution, decision makers are unaware of these hidden costs, associated with erroneous selection. Protests are the second challenge that often bogs down the acquisition process and end up becoming very costly. Although there is no system that entirely eliminates protests, the transparency of the proposed solution does significantly reduce the amount of protest. Puridiom offers the first and only collaborative, expert assisted, tradeoff based, multi-criteria procurement selection solution that addresses the challenges of "Best Value Sourcing".
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Challenge
Today most organizations and government bodies have some sort of online procurement solution that enables them to publish their solicitations and gather responses. However the critical function of selecting the best solution is almost always dealt with "lightly". Some use ad-hoc spreadsheets, some don't. Some use committees, some don't. Some use their own algorithms, some don't. And some simply flip a coin… In summary, selection solutions have not kept up with the latest advances in decision support technology. To optimize their decisions organizations need to: (i) standardize and structure their decision making and selection process, (ii) modernize the process by leveraging the forefront in Decision Support Systems, and (iii) increase the transparency of their decisions to reduce the amount of protests. The solicitation and proposal collection components have been modernized with the use of procurement type applications such as Ariba, Oracle etc...
One of the weaknesses of traditional systems is their inability to compare apples and oranges, so to speak. In other words traditional techniques are limited by their use of a constraint based selection metaphor. For example, they cannot compare a $1000 laptop with a 15" screen delivered in 3 days to a $1500 laptop with a 17" screen delivered in 5 days.
The problem is even more pronounced when the products or services compared vary significantly along the multiple criteria taken into consideration, or when comparing portfolios, which is often the case in catalogs. Puridiom offers a unique solution to address the deficiencies in the selection process that have not been addressed by traditional procurement solutions.
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Solution
With Puridiom, the days of simple spreadsheets with pros and cons columns or a proposal rating along a set of criteria are numbered.
- Optimize Procurements by Formalizing Selection Process: Large organization can only benefit from creating structured processes and standards for how every individual can select the solution that best fits their needs.
- Optimize Procurements Using Tradeoffs: A decision is the selection of the optimal alternative from a set of choices. The decision is typically made by trading off -or weighing the relative importance of- a set of factors or criteria. What makes tradeoffs necessary is that usually these factors are conflicting. For example, you may need a light laptop with a wide screen. These criteria are conflicting; the wider the screen, the heavier the laptop, thus the need to tradeoff between conflicting criteria. Puridiom's tradeoff based product selection technology was selected by Gartner as best-of-breed.
- Optimize Procurements by Leveraging Experts' Knowledge: Often buyers are not experts in every single area of their purchases which usually leads to sub-optimal purchases. Take the example of purchasing a laptop. You would assume that anyone can make an expert's decision on a simple laptop. Yet only very few experts can express the utility function of CPU speed and the impact additional memory has on it. Puridiom's ability to capture the expert's knowledge in a parameterized manner, store it in the system and make it available to all of your organization's buyers enables them to specify their need and leverage the expert's know-how.
Puridiom's decision support system allows your organization to: (i) identify and define the set of alternatives (ii) define the various factors that impact the decision (iii) determine the way these factors behave and impact the decision (expert's know-how) and (iv) weigh the various factors to reflect the buyer's tradeoffs. By allowing the decision makers to define an ideal solution in a multivariate system and comparing each alternative to this ideal, Puridiom's unique, expert assisted, tradeoff based solution optimizes the procurement selection.
Enabling Secret:
Puridiom's technology enables to compare apples and oranges. Thus it can compare proposals that have different terms and offer solutions that are not exactly the same. By introducing the concept of tradeoff along with capturing expert's knowledge on criteria behavior, Puridiom enables your procurement system to address the needs of each buyer and assess their options in real time. While traditional system alleged weighing the criteria by a simple and linear multiplication of a score (that requires a person for assessment) by a set of weights, they do not take into account expert knowledge in criteria behavior and true tradeoffs. By incorporating criteria behavior along real tradeoffs Puridiom can analyze and assess the merits of each supplier's offer based on the specific needs of the buyers. In addition and more importantly it allows buyers to compare apples and oranges. Now you can compare a $1000 laptop with a 15" screen and a 3.2GHz CPU to a $1500 laptop with a 17" screen and 2.5GHz CPU. Now you can compare portfolios of products. Puridiom uses your tradeoffs along with the expert's knowledge on criteria behavior to establish a common baseline to measure the match of an offer with a buyer's needs.
Key Features:
- Collaborative, Expert Assisted Decisions: Optimal decisions are made by capturing expert knowledge in every facet of the decision process. Puridiom raises the level of procurement competence by capturing, storing and sharing your organization's experts knowledge across the organization.
- Criteria Behavior: Puridiom goes far beyond simple weighted spreadsheets. It enables Program Managers to articulate the impact of the various criteria on their selection (i.e. extent to which additional memory enhances laptops). This expert knowledge yields optimized acquisitions.
- Real Time Repurposable Knowledge: By capturing the expert's know-how in the system and making it repurposable, it becomes part of the corporate intellectual assets. Since the expertise is part of the system, when the experts depart your organization, their expertise is not lost.
- Understanding and Justifying a Decision: Often, procurement systems are used to justify or understand a decision. Given a selection, Puridiom's inference engine will highlight the relevant criteria and measure the tradeoffs that yield the desired results.
- Analyze Decisions: Puridiom's ability to rationalize, collect, and store insight into users' selections and then analyze them to learn from and optimize them is invaluable. The high cost of traditional techniques stems from the need to continually program the system to assess new alternative.
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Benefits:
Puridiom's approach reduces the solicitation processing time and resource requirements: -
Process Savings:
- Market research done in fraction of time:
- The burden of drafting the specifications is passed onto the suppliers. With Puridiom you no longer need to go through the hassle of the tedious task of drafting the specifications of the solution you are seeking and settle down for the spec that is the least common denominator of your needs
- Now, buyers express in general terms their preferences and tradeoffs which is a significantly easier and shorter process
- Buyers no longer need to be experts in every area of the commodity or service acquired. For example they do not need to know if the computer's performance is measured in Megabits, Megahertz or Watts. All what is required is to express in general terms the importance of computer's performance relative to other purchasing decision criteria (price, delivery etc).
- Eliminates the human resources required to evaluate every proposal for each solicitation. This process is often repeated multiple times to eliminate human bias (i.e. each proposal is rated by several assessors)
- Eliminates data entry by capturing the entries of the vendors straight into the system
- Raises procurement ability level of entire organization to that of an expert
- Superior savings:
- Deliver major savings, by optimizing every purchase or acquisition
- Allow vendors to compete on all criteria
- Reduce protests volume with objective expert know-how up front instead of subjective human assessment after the facts
 about Puridiom's innovative solution and see how you can DELIVER UNPRECEDENTED SAVINGS.
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Reverse Auction Revolution
In today’s reverse auctions, the buyer sets a minimum acceptable set of specifications. To reduce their costs and submit the lowest possible bid price – the only variable open to the bidders, the sellers lower their specifications to just meet the minimum target specifications. The result is the cheapest product that barely passes the specification threshold at the lowest possible price. The old saying "You get what you pay for" has never been truer.
Imagine a reverse auction where the sellers can compete on EVERY criterion that the buyer cares about, not only on the price. Imagine a system that puts at the buyer's finger tips the Subject Matter Expert's knowledge to optimize each purchase for the intended recipient. Imagine sellers submitting their proposals and assessing in real time where they stand and what features they need to enhance, competing on ALL features of value to the buyer, not just price. With such a system the buyer ends up getting the best product that most closely matches (or exceeds) their needs at the lowest price (not the cheapest product at the lowest price). In other words, you receive the greatest value for your money.
Unlike traditional reverse auction where qualified sellers bid on price only, with Puridiom your suppliers compete on all the criteria you care about, thus delivering the best value for each purchase. What's unique about our solution is our Proposal Assessment Engine that can compare apples and oranges in real time based on your trade-offs and leveraging subject matter expertise captured in the system.
In summary, instead of bidding on price only, your suppliers compete on all the criteria you care about, thus delivering the best value for each purchase.
Learn how Puridiom's technology breakthrough changes the way reverse auctions are performed.
Contact us for more information at info@puridiom.com
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RFP/RFQ Selection
The three challenges that plague best value RFPs are (i) the time consuming process (ii) the lack of structure around the selection i.e. the selection of the best proposal is an art not a science (iii) the difficulty of specifying the desired solution.
Puridiom's "apple and oranges comparison engine" addresses these challenges. (i) it automates the selection process. Based on the specific needs of the buyers and the captured expert's knowledge, Puridiom can analyze and assess the merits of each proposal, especially when they are not exactly identical. Puridiom levels the playing field for incongruent offers. (ii) by replacing the tricky process of drafting the specifications by a simple high level expression of preferences and tradeoffs Puridiom enables you to deliver solutions to the challenges of traditional RFx
Market Analysis & Pre-Solicitation Research
Puridiom's inference engine can derive the tradeoffs based on a ranking of a few items. Our technology has the unique ability of helping buyers identify what criteria affect their decision and understand their importance. Puridiom's inference engine can derive the buyer's tradeoffs based on a ranking of a few items which are usually the result of a couple of solutions researched by the buyer. The power of the inference engine is its unique ability to help understand an intuitive preference highlighting the areas that justify the selection.This provides a rare insight into your purchasing decisions.
Learn more about how Puridiom's technology breakthrough changes the way RFP/RFQ are performed. Contact us for more information at info@puridiom.com
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Catalog Browsing
You have invested so heavily in building your catalog and your supplier have posted their products and portfolio of products in it. However your search engine has not kept up with the filing capabilities. To make matters worse, as your catalog volume grows, the need to locate the right product for each buyer has become increasingly important. By introducing the concept of tradeoff along with capturing expert's knowledge on criteria behavior, Puridiom enables your procurement system to address the needs of every buyer and assess the options that best meet these needs in real time. By incorporating criteria behavior along real tradeoffs Puridiom can analyze and assess the merits of each supplier's offer based on the specific needs of the buyers. In addition and more importantly it allows to compare apples and oranges. Now you can compare a $1000 laptop with a 15" screen and a 3.2GHz CPU to a $1500 laptop with a 17" screen and 2.5GHz CPU. Similarly, you can compare portfolios of products that are not congruent. Puridiom uses the your tradeoffs along with the expert's knowledge on criteria behavior to establish a common baseline to measure the match of an offer with a buyer's needs.
For more information how Puridiom's technology breakthrough gets the desired results from disparate catalog searches are performed.
Contact us for more information at info@puridiom.com
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