Leveraging the WEB to optimize supplier management

When Tom Y. Ren and his wife Lily Xiong first got Houston-based AECsoft USA Inc. rolling in the late 1990s, they were doing it primarily as a hobby. At the time both were working as programmers for industry. However, they were no longer challenged by their programming jobs, and they knew there was something better for them.

“At the time the Web was really just starting to gain ground, and we could see that the future was quite bright for Web-based application,” said Ren, AECsoft USA’s chairman and chief technology officer. “Our first thought was to produce something where people could easily buy and sell online.” The entire process got a sincere boost in 1999 when a few companies asked the couple to develop e-procurement and online trading solutions. “When it worked that was when we started realizing the power a B2B exchange holds.”

Developing a niche

Undoubtedly the e-procurement/e-sourcing arena is full of large IT and software development firms aggressively competing for a piece of the pie. While the number of people willing to invest in solutions
continues to grow each year, the sector also includes some of the key names including Ariba, Oracle and
Emptoris. While this list may be enough to scare a number of entrepreneurial firms out of the segment, it just made Ren look at how to properly position AECsoft
USA.

The key for AECsoft USA has been to develop a fully configurable system that not only covered the esourcing and procurement areas but also satisfied the market’s need for an extensive supply management solution. “We really wanted to hit the market with a solution that addressed customer-specific e-procurement and supplier management needs, and we have been successful in accomplishing this goal. In fact, our system has essentially evolved into an efficient supplier management and procurement solution,” he said. “The fact that we are also quite strong in the supplier management component only helps distinguish our value to the client.”

Because the supplier management component involves collecting data about the individual suppliers, AECsoft USA has also been able to concentrate on helping with technical aspects of supplier diversity. “Our system helps keep the diverse suppliers in the mix, track spending in comparison to goals and also reaches in to understand and track second tier spending activity.”

The success in development is obvious when looking at the heavyweights among the 200 organizations on AECsoft USA’s client list including United States Postal Service, KBR, The Coca-Cola Co., FedEx, Schlumberger, as well as MGM MIRAGE.

Understanding the offering

While all the e-terms (e-sourcing, eprocurement, etc.) can get confusing, what AECsoft USA provides brings a wealth of complex operations into one simply activity. Essentially, AECsoft USA offers its clients a cost effective Web-based software solution focused on managing, sourcing and optimizing supplier resources; while helping customers to track and increase their spend with diverse suppliers.

According to Ren, the design fully integrated all the procurement activities with a focus on delivering organizations a greater level of flexibility through a userfriendly interface and continuous end-toend customer support with automated ondemand options.

Accentuating innovation

“We are innovative in that we have automated as much of the entire supplier management and e-sourcing process as possible. Most of our competitors still have a lot of manual processes, but we optimized everything. This automation makes everything far more flexible for configuration. Customers can make their own changes easily.” Using automation, AECsoft USA has also been successfully compiling and indexing roughly one million diverse suppliers from over 300 sources, and from suppliers themselves. “With this data, we are able to help clients effectively track and verify corporate and governmental diverse spend reports,” he said. “We also compiled a searchable database for diverse suppliers, which can immediately help customers to increase their diverse spend by finding the most suitable diverse suppliers on the fly.”

Additionally AECsoft has developed (and applied for a patent) for an innovative search technology, which can help customers to identify and rank suppliers from various data sources globally. Ren is very excited: “This can immediately help customers to optimize supplier selection, compliance and participation.”

Living by the model

One thing Ren has learned, to date, is the importance of investing upfront in actually producing a solution before going off to the marketplace to tout your capability. “That has been the model that has propelled our organization to its current level. It is one thing to promote what you are capable of doing; it’s something completely different to be able to show them an actual product,” he said. “It immediately shows businesses that you are capable and reliable. This is instrumental in building the trust aspect known to drive business relationships.”

As diverse firms, it is not uncommon for companies to make the assumption that the business is too small to be able to actually fulfill their enterprise and long-term needs, Ren explained. “If you can demonstrate this upfront you alleviate some of the concerns and help overcome the wrong perception,” he said.

Looking forward

While AECsoft USA may not be the largest company in its sector, that is not going to keep Ren from aiming to be the best provider within the space. “We understand that this is an evolution, but we know we are on the right track to achieve our goal,” he said. The first step understandably is to grow market share, which Ren anticipates will be quite aggressive over the next three to five years. “Over this time period, we plan to be 10 times our current size,” he said. “Obviously the challenge here will be in increasing our focus on marketing what we already have and demonstrating how it can improve the methods and processes potential clients utilize.”

According to Ren, AECsoft USA has historically spent almost all of its time dedicated to programming and developing a more extensive offering. “This has helped us build an extremely [powerful] solution, which puts us in a position where we are already offering our customers the next generation and best-in-class supplier management and e-sourcing solution,” he said. “But now is the time for us to capitalize on what we have to offer and let more people experience our solution on a global scale.”