ProcureTech caught up with Edmund Zagorin CEO and Founder of Bid Ops, the AI-powered strategic sourcing software powered company.
During the conversation, Edmund shared his thoughts on best of breed solutions, superhero teams, building with scale, complexity, digital transparency, the power of procurement, running and negronis…
1. What is Bid Ops’ mission and USP?
The name Bid Ops actually refers to a conviction that we have about how procurement and specifically digital procurement is evolving. We believe that procurement will follow the evolutionary pathway of sales and marketing with regards to digital transformation.
What that means is that, instead of being more administrative, processes become seen as opportunities like a project in sales and marketing. Those opportunities will be tracked in a pipeline, with stages in the pipeline. You will buy technology, like data services, or microservices that are best of breed and plug them into different stages in the pipeline, to reduce friction, improve throughput, and accelerate project delivery.
That really is a very different vision than what a lot of people who may have invested in giant suites or some type of ERP monolith have pursued up until this point. It’s something we’re seeing is happening across the world.
This idea of best of breed digital transformation has really captured a lot of imaginations in terms of the digital road mapping process that a lot of companies are now going through.
Bid Ops focuses on the sourcing piece of that. So, we see ourselves as essentially a CRM or Salesforce like tool for managing your supplier communications. Supplier communication in procurement has traditionally taken two canonical forms, the email and the spreadsheet. What Bid Ops does is allows you to get out of email and spreadsheets altogether if you want to and at very least dramatically reduce the amount of transactional communication in your inbox and the number of spreadsheets that you have to manually update. It does most of that work in a sourcing process for you and allows you to create templates with built-in automation that will also be benchmarked against best practices. We can tell you things like the cycle time between step A and step B. We can also compare the pricing that suppliers offer against an AI-generated benchmark – known as the intelligent first offer, which is where the AI actually recommends a price to the suppliers at the outset of the negotiation. The suppliers can also modify and submit it. This takes about 90% of the work on the supplier side off of the process and generally results in greater cost savings outcomes and faster POs on the supplier side of the table, so it improves their sales efficiency.
To sum up Bid Ops, our tagline is “better quotes faster”. Most of the technology we build whether it’s pure software or some of the more advanced machine learning models that power our AI is what it’s all about. Were just getting procurement teams out of as many transactional processes as possible to focus on being a better strategic partner to the business.
“Bid Ops’ tagline is ‘better quotes faster’”
2. What have been the most significant decisions in the Bid Ops journey so far?
There are two big decisions that we’ve made in the past six months.
Firstly is a product decision, which has had a tremendous impact, which is to really build with scale in mind.
Our CTO Ben Leiken, has this phrase he’s fond of which is that “performance is a feature”. That’s particularly important in procurement because a lot of procurement teams might have spreadsheets that are simply so large that other web applications cannot really effectively manage them. We have customers today that manage a single project that might have 10,000 or 20,000 lines, I’m talking about rows of data in the actual bid table. So, building for performance, and making sure also that we are really, really strict when it comes to our own KPIs really ready to go and super responsive. That’s something that we’ve paid a lot of attention to in this drive for performance. Also, on the awarding side, automating the quote, analysis, comparison at the line-item level has made a huge difference. This is all part of all part of building for performance.
Bid Ops today is one of the top solutions for direct spend teams and in manufacturing, precisely because there just aren’t very many solutions out there, where if you have 10,000, line items, you can upload them, quickly quote them out across a group of maybe 100, or 200, suppliers, and then automate the analysis of which is the best price for each line item with taking into account conditional columns, like lead time, quality, certification, and answers to questions. That’s the complexity. Being able to do the complex stuff really, really well and having a really simple, clean user experience around that has been a game-changer for us.
The second significant decision that we’ve made that has really accelerated interest in the market for our solution is offering customers the ability to begin using the platform and we have what’s called a ‘guaranteed business case or a save before you pay guaranteed’.
We all know that procurement software has a rather unfortunate history of being bought and taking so long to implement or so long to install, being so user-hostile and really difficult to use that it becomes a kind of shelfware and companies. After two, three years customers end up hiring, Accenture, Deloitte or someone else to use the software on their behalf, rather than then really being able to set it up so their own procurement team can use it. Bid Ops’ software is very user friendly, so, we have extremely high rates of user adoption, not just within procurement, but a lot of times within stakeholder groups in other parts of the business where procurement wants to create a self-service process.
“Procurement software can take so long to implement …
Bid Ops’ software is very user friendly”
People say, “well, you know, we’re quite interested in this, but we’re not sure you know, what’s the proof? How do we know if it works?” Our response is “try it out, and run some processes and save some money” to show we mean what we say, we put our money where our mouth is, and have skin in the game”. That’s, that’s been enormously effective for us, as a new company earning the trust of our customers.
3. What do you look for in the perfect customer and what do they look for in you?
I would say our perfect customer is a procurement team that’s driving a lot of business impact and has a laser focus on results. We like to ask our customers, how do you drive more impact through the people on your team? Do they get a bonus at the end of the year? That’s actually a question we ask them in the qualification process. What KPIs are you measured on, is it speed? Is it cost saving? Is it value creation? Is it new product introduction, is it accelerating the delivery of projects, because these are all things that if those are KPIs, then we know it’s going to be a really good fit with what our product offers.
Ok, so what makes a customer a bad fit, I would say, there are procurement teams that are really compliance-focused and really risk-focused. For example, in large financial institutions. It doesn’t mean that we’re a bad fit for them, it just means that in their digital journey, they often wish to prioritise solutions that actually are focused on risk, that focus on KPIs associated with the existing supplier relationships that maybe give them insight into the supplier’s financial stability, or insurance certificate status or other KPIs.
Bid Ops is really much more about executing projects and executing processes. If we’re dealing with a procurement team, where most of the people on the team may have come from a legal background, or they care a lot about their specific contract offering or contract terms, it may be that actually the best fit from a digital transformation standpoint is for them to begin with Contract Lifecycle Management, or build out from that existing contracting process, rather than being focused more on Operations, Engineering or Manufacturing, which is, to a degree, the technology focus of our solution. That said, we do have a lot of customers who source business services, software, IT services and provided that they are focused on a great service experience creating some savings and more traditional procurement KPIs, then they have a great time on Bid Ops too.
4. What are the foundations of a great team?
Building a great team is one of the key things to do, especially early on with a start-up. The thing with a great team is every person contributes in a bit of a different way. You can think of it like a group of superheroes and each member of the superhero league has a different superpower. So it’s not like there’s one thing for everyone that’s kind of the magic, rather than you know every person has to have this quality, it’s more like every person has a different set of qualities. That kind of makes the team run and, I would say different start-ups have a different focus in terms of the function that drives the evolution of the start-up.
“A great team is important … each member is like
a superhero with their own superpower!”
There are certain start-ups that are sales-led, where the sales function is emphasised, and the start-up is really built around the sales motion. There are certain start-ups that are marketing focused, where, you know, they have a great web page, great social media presence and so on. Then there are start-ups that are engineering and product-focused, where really, the whole company is oriented around building a great product and we’re definitely like this at Bid Ops. We emphasise engineering, in our culture and we’re product led as far as a lot of the direction that our company takes from a go-to market standpoint. We emphasise the role of engineers within our company culture.
During COVID, where we’ve all been working remotely and haven’t been able to spend too much time in person together, really good collaboration and open communication have been important. You hear this word a lot, but a bias towards action, someone who is not asking for permission or waiting around to take any action but tries it and if they get it wrong, then, do it again. I’d say that those are kind of the elements of a good team.
5. As we emerge from COVID, what will you be doing differently?
There are still some open topics, for example, if it will make sense for us to re-join in the office. We had an office before COVID and had given it up because it just didn’t make much sense to keep having it if we weren’t going to use it. I do think that it’s very likely that we may have some form of an office again, just because people do like being able to meet up in a conference room and whiteboard an idea or have some kind of a brainstorming session in person. It’s also a good place to host clients, and, of course, other stakeholders in our business, like venture investors and ecosystem partners.
We do emphasise as a team, getting together in person in different cities, like we’ve had team summits where we’ve all met up in a city, usually either San Francisco or Atlanta, which are our two hubs. But we might even pick a different city for the next one.
It’s been a year working completely remotely, with no meeting up at all and we’ve done pretty well at that, I’ve got to say, almost surprisingly well. We’ll continue to look for people to join our team who like working remotely and can do it when need be. But also, I think we’ll be excited to see each other again when we can. I’m looking forward to it.
“We’ll continue to look for people to join our team
who like working remotely”
6. What is the vision for Bid Ops in the future and what will be most important to achieve it?
I think, so far we’ve emphasised our product and engineering, pipeline building capabilities, and automation capabilities; then been really intentional about structuring databases along the way to capture information about the process. Then to feed that information back in so that most of the processes and Bid Ops are self-learning and self-improving. I think that what we’ve seen as a result of that is there’s just a tremendous amount of data in our system, which is part of the way that we’re able to benchmark things like cycle time and pricing.
Going into the future, we see incredible emphasis in the market, on reporting around environmental sustainability, we think climate change will be a big, big topic, as well as supplier diversity. We have customers right now who are leveraging our dashboarding capability to actually build custom reporting around these cases. API is also something that that you can use in Bid Ops.
From a product vision standpoint, we’re increasingly emphasising the role of real-time transparent data in a set of processes. It doesn’t need to be manually updated and actually stays up to date by itself. That’s something that over the next few years we see as being a major theme in the market, not just automation, but also tracking, reporting and ultimately you want to get to forecasting. So you can actually set targets for supplier diversity right in the dashboard itself and then measure against that. I think increasingly there will be those targets for sustainability as well, which of course, requires a much deeper level of analysis because instead of just going to the supplier level, you actually have to go down to the skill level and gain insight into that too.
7. How are you doing good for the planet?
To me, sustainable procurement is a really important practice. I worked at an organisation called Responsible Purchasing Network and one of my roles there was actually creating guides, buyer’s guides and spec sheets around product categories for the built environment and the LEED certification for green architecture. When I was getting that certification, and just meeting other professionals that do benchmarking for this area, one of the things that people always emphasised is that sustainability is three pillars, its people, planet and profit. There’s financial sustainability, there’s ecological sustainability and social sustainability.
I think that one of the areas that I’m particularly excited about is Bid Ops increasingly has the opportunity to enable these analytic capabilities for our customers, but also to use the power of procurement itself, which is a tremendous power, with or without any automation. With automation, it becomes more accessible and so, there are organisations that can now use procurement and be strategic about their spend in ways that might have been challenging before.
“sustainable procurement is a really important practice made of 3 pillars:
people, planet, profit.”
One example of this is Bid Ops recently added a customer who we gave a 100% discount, the Food Bank of New York. This is an organisation where it’s providing critical services to so many people who are hungry and in poverty, in part due to the economic results of the pandemic and other events that have been occurring.
I’m excited to see what happens when non-profits and Community Services begin to invest in their own supply-chain functions because there’s just a tremendous amount of power there and opportunity. In the non-profit sector, in the food banking sector, in the community healthcare sector, you haven’t seen a huge emphasis on the supply chain and so there’s just a lot of low hanging fruit in terms of improving the quality of service delivery, for these essential functions in ways that I think will make the world a much better, nicer and certainly more accessible, more equal place.
INSTANT EDMUND INSPIRATION
1. What is your favourite book, podcast, blog or magazine?
My favourite book is, ‘If on a winter’s night a traveller’ by Italo Calvino and I like that book because it’s quite magically constructed, it really makes you look at the book in your hand. If you’ve read it, you can realise that partway through the book, you actually become a character in the book. Quite a nice trick. In terms of more business focus, I do really like Daniel Kahneman ‘Thinking Fast and Slow’. Just behavioural economics in general is fascinating. It’s where a lot of the insights behind Bid Ops came from. So that’s a book we go back to pretty regularly just to check out some of the examples and case studies.
2. What is your favourite app or piece of technology?
Not to sound cliche, but I really do love Slack. I use it a lot and there’s a lot of embedded apps within Slack that I like quite a bit. I’d also say that I do enjoy taking photographs and so there’s a lot of good technology that we take a bit for granted, that’s embedded in just the cameras that are now in many of our pockets that we’re carrying around to help us take really nice photographs.
3. What’s your favourite way to celebrate success?
I really like running and I live in San Francisco in the Mission District right at the base of Bernal Hill. If something really good happens, and I want to celebrate it, but it might be too early in the day to mix a cocktail or something, so I go and just walk up the hill and look out over the city. It’s a nice view from up there. It’s just nice, it’s nice to be next to a big public park where when you turn the corner you don’t see the city for a second, it feels like you’re in a wilderness area.
4. What is your favourite cocktail?
You know, I’d say I like a Negroni.
KEY TAKEAWAYS
1. Build with scale in mind.
2. Performance is a feature.
3. Do the complex stuff really, really well and have a really simple, clean user experience around that.
4. Emphasise the role of real time transparent data.
5. Use the power of procurement itself, which is a tremendous power, with or without any automation.
About Bid Ops
Bid Ops is strategic sourcing software powered by AI, driving savings by getting better quotes faster. Using intelligent price recommendations and dynamic benchmarks, Bid Ops AI helps procurement teams overcome complexity to secure optimal commercial terms with top suppliers. With Fortune 100 customers and impressive case studies, Bid Ops enables procurement teams to deliver a delightful experience to internal stakeholders with a simple process that gets tangible business results.
About ProcureTechSTARS
Our industry is moving forward faster and faster, empowered by innovative, progressive digital procurement solutions created and led by inspiring teams. ProcureTechSTARS are the digital procurement company CEOs and Founders that are leading the change, they are entrepreneurs, engineers and architects collaborating to transform procurement and the enterprise. In an open conversation with these leaders Lance Younger will be discussing the highs and lows of building the future now, the challenges they’ve faced, their perspective on accelerators and hot topics, and what keeps getting them up in the morning (and keeps them up at night).
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