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Sourcing Apps Get SaaS Boost Sign Up to receive Daily News Alerts in your E-mail Inbox
Posted on Wednesday, May 31, 2006 6:52:00 PM |
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TradeStone Software Inc. yesterday revealed that it is offering its product sourcing applications suite as a hosted, on-demand service, a move the company hopes will appeal to smaller and medium-size product development companies, retailers, and other players in the global consumer-goods supply chain that lack the resources to deploy and manage licensed software on premises.The TradeStone Suite is built on a J2EE foundation with composite applications for managing product information; quoting; multi-vendor comparisons; orders; bill of materials; logistics; and financial accounting. Because TradeStone was built on a Web services architecture, the transition to an application service was made without any changes to the suite's technical underpinnings, noted Kamal Anand, TradeStone's chief technology officer, in an interview with Managing Automation.By adopting a software as a service (SaaS) delivery model, the company hopes to attract smaller consumer products players across the business spectrum that want to tap into the globally dispersed supply chain but are not able to due to financial and technical constraints, according to Holly Allison, TradeStone's vice president of marketing and business development. By using a Web-based interface, suppliers, for example, can bid on sourcing contracts, view production lead times, see quality assurance testing data, and gain visibility into logistics tracking -- tasks that are laborious for smaller players that lack more modern digital systems, she noted. While end-to-end procurement systems have been of interest primarily to larger and more financially endowed companies, TradeStone hopes the SaaS version of its software expands the market opportunity. For instance, while the on-premises version of its software lists for between $300,000 and $1 million (based on the number of seats licensed and amount of services required), the SaaS version ranges from $100 to $300 per user per month (depending on the number of users) -- without any additional monies spent on application implementation and maintenance. Suppliers that just want to use the software to collaborate with retailers and product developers pay a small one-time fee to cover operating costs, a spokesman for the two-year-old Gloucester, MA, company said.Another user benefit: minimal training time. When TradeStone Suite was built, the company sought to create a sourcing system with simplified field structures and workflows, since complexity at this level tends to limit the adoption of many enterprise applications, Kamal said. Because of its streamlined design, company officials said that user companies can be up and running on the SaaS version of TradeStone Suite within two weeks. "We've received lots of positive feedback from customers on this," Kamal said. In fact, Allison added, "One customer has a MySpace about the use of our product, with a blog that contains ideas and examples of factories being added online." Peer feedback is important to all companies, but it is particularly useful to product development companies looking to head off supply imbalance problems that can lead to stock-outs. Customers using TradeStone Suite can rate suppliers on their communication skills and ability to deliver quality products on time to store shelves, Allison said.Another key benefit to small manufacturers is the suite's ability to help manage SKU proliferation. Say an MP3 manufacturer sources component products and contracts assembly to Asian companies, Allison said. The company needs all supply chain players to work in lock step to make sure it has the right product mix on retailers' shelves (an MP3 player without headphones becomes useless). TradeStone Suite enables collaborating business partners to see a single version of truth -- from product component, assembly, and delivery requirements -- and work together to meet business needs at the retail level, Allison pointed out. TradeStone is focused primarily on the apparel market, but also has customers in hardline and other consumer products areas, she noted. The 50-person, privately held company counts roughly a dozen retail customers, including Federated Department Stores, Deutsche Woolworth, and Guitar Center. Larger customers average 800 suppliers using TradeStone Suite, Allison estimated. One company that has signed on to use the SaaS version of TradeStone Suite is IBC Worldwide, a provider of marketing and custom manufacturing services to Fortune 100 companies. The company is already working on replacing a custom-built order management system that pivots around a Microsoft Access database and Excel spreadsheets with the TradeStone Suite. IBC's cobbled-together approach worked when the company was smaller, but success has meant finding ways to streamline operations, and provide better reporting and financial transparency inside its four walls and to partners, noted Cameron Reynolds, vice president of finance and administration, in an interview. TradeStone's SaaS delivery model, he said, offered a resolution to many of those issues. It's scaleable without needing more in-house servers or additional technical staff. Uptime is promised at 99% availability plus (through the use of an undisclosed third-party hosting partner) -- something a small company can only dream of. And, importantly, the application suite is accessible to sales people, project managers, and customers across the globe with access to an Internet connection. IBC hopes to achieve initial soft benefits within the first three months of using TradeStone (the first factory will be brought online in August), and achieve deeper business process efficiencies once the suite is integrated with other enterprise systems, which is expected within six months (data can be shared via XML feeds), Reynolds said. "We've set early benchmarks and expect to go through continuous improvement," he said. For example, the company is "looking for a 50% increase in the number of projects that a project manager can handle (IBC can have as many as 50 requests for quotes in process at any given time, each with varying complexity)" while increasing client activities "in the 30% to 40% range," he added.IBC, a 15-person company, hopes to "push $5 million" worth of business through the system by year's end, Reynolds said, noting that the SaaS model is the only way the product development company could afford to use "world-class" software to streamline its business processes.Although IBC looked at competitive offerings from undisclosed vendors that specialized in spend analysis and tracking, the company was attracted to TradeStone Suite's project management capabilities. "[TradeStone] has all the capabilities in spend analysis as the others, but the real focus for us is on project management and this software was a better fit for process improvement."
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