B2B purchase order tracking

Entomo's product suite is designed to track and manage purchase orders after they've been created in a corporate (ERP) system. The suite is an outside-the-firewall hosted solution that provides transmission of orders to suppliers, visibility into order status, analytics, and full order history.

The Product Suite

Entomo sells two software products: SmartHub SRM and SmartBridge. Sunil Pande, one of the founders, describes the suite as Lotus Notes for direct procurement, plus EDI, plus analytics. This is pretty good shorthand for what the products do.

SmartHub is a hosted, private e-marketplace that takes in purchasing transactions (POs, scheduled releases, etc.), stores them, distributes them to suppliers, and keeps track of what happens to them.

Value

The direct materials SRM packages can provide value in three different areas:

• By automating the order delivery process, they reduce processing effort, reduce the risk of orders going astray, and reduce lead time (slightly).
• By providing order visibility to both buyer and supplier, they permit both sides to reduce safety stock and/or lead times, since uncertainty surrounding the delivery is reduced.
• By giving commodity managers or expediters the ability to track, recall, cancel, or change orders, they reduce the labor required from commodity managers and reduce uncertainty in supply.

Entomo can claim that it provides all this value. The question for potential users, however, is whether the value provided is worth the investment. Companies where the cost of managing orders is high (e.g., in high-volume, long lead-time, or highly changeable order environments) are the most likely to get a reasonable ROI from the product. Entomo offers a business impact analysis to potential customers in which they set out the estimated ROI.

Assessment

POSITIVE: The attention to order history and the ability to attach comments that explain changes in orders will be an "Aha." to the companies that need it. Customers have been able to use the product for applications well beyond the nominal capabilities of the product. One customer uses it for VMI. Another uses it to create blanket orders and then releases the order within SmartHub.

NEGATIVE: Being a substitute for fax/EDI can be a real barrier to supplier enablement. Our impression is that most customers will want to use this product only for the 10 or 15 most important suppliers. Suppliers that use fax only will not be able to take advantage of most of the facilities. (Obviously, the buying company can still print out the order and fax it to the supplier.)The screens we saw (may not be fully representative) used somewhat unusual terminology and data structures; in all probability, installations will require customization. The handling of the order history and the commodity manager's work management were more appropriate for relatively simple environments than for large corporations or complex ordering situations.For the number of customers it has, Entomo has a surprising amount of experience with integrating ERP systems, having done integrations with SAP, Oracle, JDE, and QAD. Obviously, more experience would be better.

BOTTOM LINE: Value is available from this product; and the companies who need the product will recognize the value. The order history can be an important differentiator, but potential customers should review the capability carefully to make sure it is actually useful.

A longer version of this report is also available.

For other SRM company assessments, see our archive.