GroupRFx: A Dragon’s Den View by Kelly Barner

Editor’s Note: On January 21st, 2014 I had the opportunity to interview Year in the Life candidate GroupRFx, a New Wave company that offers a competitive bidding platform designed to improve the procurement and tendering process within a GPO framework.  In the post-show commentary, our Dragon’s Den (or Shark Tank if you prefer) panel of experts will provide their take on the interview and offer advice to the company.  Today’s guest panelist is Kelly Barner from Buyers Meeting Point.  Here is what Kelly had to say about GroupRFx;

I first learned about the Group RFx bidding platform in March of 2012. The fact that they are still in the marketplace bodes well for their longer-term success in the procurement landscape. In the interests of full disclosure, Buyers Meeting Point is listed as a partner of Group RFx’s, meaning that they use relevant content from our news feeds to educate and inform their users. We have no insight into their solution roadmap, customer successes, or strategic plans.

A point that was raised by Dale Gregg in the interview, and which is echoed on Group RFx’s website is their simplicity of use for both buyers and suppliers. He is right to point out the investment of expensive resources in the bid preparation and response processes relative to the value of the contract in question. Anything that can be done to minimize this cost without diminishing the effectiveness of the bid is good business for both sides.

Like many other solution providers, Gregg shared how often he finds people using spreadsheets or other inefficient channels for administering their bids. Group RFx’s functionality is positioned as simple to use, with relatively short ramp up times for either a program or an event. The pricing is completely transparent, and they offer free, pay-as-you-go, and package options.

What this part of the interview made me think of is how much time and effort is put into selecting a solution that has every capability under the sun (spend analysis, RFx, auction, collaborative bidding, optimization, contracts, SRM, einvoicing, payables, and so on) but how little of that functionality gets used on a regular basis. This holds true for organizations of varying sizes and procurement maturity levels. Wouldn’t it be refreshing for an organization to admit that most of their projects can be fully accommodated by a simpler (not to mention wildly less expensive) solution? Anything more complex could be handled as an exception with a one-off contract, paying appropriately higher rates as warranted by the high spend/high risk/high savings potential projects.

Gregg spent what I think is an appropriate amount of time characterizing the mindset of procurement professionals. We have the expectation that solution implementations are supposed to be dizzyingly complex. Any solution that does not give the project leader gray hair, and IT a migraine, must not be the real thing. I disagree, and so does Group RFx. If people could get out of their own way and admit their relatively basic needs, they might actually spend more time using the solution than battling compliance issues.  As frustrating as it is, there is something wrong with a solution if people would rather use Excel than log into a user interface.

I would like to know more about the target market for Group RFx’s solution. In the PI Window on Business interview, we heard about the capabilities to support either real of virtual GPOs by consolidating demand before going out to bid. It is an interesting differentiator, but not one that has a clear presence on their website (that I could find). If GPOs are a conscious part of their growth strategy, that should be made loud and clear. I believe it can be done in such a way that non-GPOs are not turned off. Higher education may be a market that Group RFx can transition into easily from their background in healthcare. Both industries are GPO dependent, and many institutions of higher learning are just starting to wake up to the fact that their reliance on GPOs has left them without any internal procurement capabilities.

An interesting, but undiscussed feature is their network, which allows buyers to run private events where they control which suppliers may respond, and public events where the entire registered Group RFx supplier community can opt to participate. This will allow them to compete with much larger solutions offering supplier networks for the convenience of their users.

Be sure to check out our other Year in the Life Candidates as well as follow The Year in the Life 2014 Series on Twitter #YRiLife2014.

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