Closing Remarks (We do not go further for e-bid and e-procurement business)

We decided not to continue our project our business and not to convert our idea into business for the following reasons:

If we check the companies that enter the e-bid business, we will see that only big companies has been successful. The examples in Turkey clear this comment. Overall 4 companies are there in the sector and Koç Company and Sabancı Company are the leading ones. They are also two of the ten biggest company in Turkey. I sense from the interview with Uğur Güntekin that even Koç Promena is struggling in the market. In Portugese, 20 construction company and 1 telecom company got together and founded an online procurement and online bid system. That tells me how much investment budget, market connections, experiences and market credibility we need to start up. These requirements exceeds capacity of start-up companies. The sector of online procurement and online bidding is not appropriate for start-ups.

We have to make a deal with procurement departments of companies. They have to demand or we should be able to create demand to sell our product. However; guys in procurement departments are not well educated. Only 10% of them, according to Uğur Güntekin, are educated from related departments of universities or has bachelors degree. Therefore they are not aware of needs of modern world and they do not believe the benefits of an web based application. They may trust more in their classical methods. The 90% obstructs our way.

As we mentioned in our early post about the interview with Ugur Guntekin, consulting service is a necessity to be able to reach the real potential of system. Unfortunately, it needs  a lot of experience and budget that we lack. Additionally, there are powerful competitors that dominate the market such as Promena and Intengo. 7 of 14 automotive firms in Turkey that we listed on blog work with Promena and 1 of them works with Intengo.

Not going behind the idea is an answer also; this result is OK for us. Process is more essential than the results for this course and we learned a lot in this process.

Thanks GOB, Thanks Michael Goldberg.

FINAL PRESENTATION

THE LAST CANVAS

OUR VIDEO

Let's watch our professional video with great acting, sound editing, video editing and visual effects :)  I do not know whether you like the video or not; but we did have so much fun while preparing it.We filmed a summary of our process with advices of Michael Goldberg, and what we learned from the course and interviews.

Interview with Mehmet Ziya Telli (Efekan Güven)

The last interview of GOB team is with Mehmet Ziya Telli. He works for IBM for 25 years. He was country manager for 13 years and currently head of client representatives in Ankara. There are more titles he had in IBM which I forgot. I talked him about in other post before; lets cut it out here :)

He is familiar with student projects since he mentored so many projects of CTIS students. He took canvas from my hand and started to read it word by word and corrected even the grammatical mistakes he saw. We added solution architect to key partners. We aimed customization as revenue; therefore someone from us has to offer solutions to unique customer problems. That is why we need solution architects. We change the term cash to investment budget and added market intelligence to key resources. He put key resources in a queue. In addition to that, we used the term of competition rather than rivalry.

Another important point is the change in the perspective of lower prices. Rather than lower prices, we have to offer lower price/(performance+conditions). Because price is not the only parameter that our customers evaluate. They also look at quality, production certificates, CE norm, shipment, shipment duration, payment conditions, etc. Lets summarize them as price/(performance+conditions). In addition to that, we should not forget the queue of marketing, sales and channels.

There is no need to tell other points of interview, not to fall into repetition.

Efekan Güven

LinkedIn Account

Here is LinkedIn account of our start-up company: http://www.linkedin.com/profile/view?id=271227531&authType=name&authToken=61DL&trk=wvmx-profile-title

It will be used to reach potential customers.

Interview with Marketing Manager of Coca Cola Ankara (Cem ÖMEROĞLU)

Last Monday, I made an interview with Reşat Yavuz who is the marketing manager at Coca Cola in Ankara. He worked  at Public Procurement Agency for two years. Since he has two year experience in the sector, we think, he would help us a lot. However, he gave advice to us to not enter the sector with such a project. He said that, every organization and big company like Coca Cola already has this kind of system and all most all of them are updating the system on alternate days. By doing so, they try to keep up with technological developments. He said that there are already millions of project like GOB in the market. The market is really huge and it is required a great experince and huge capital in order to compete in the sector. Therefore, GOB will not be as successful as you'd expect. Thus, put it into trash."

Current Offering Monitor (Arda Unal)

    This is our Current Offerings Monitoring prototype. Only our staff has access to all of these offers and prices. In other words, this is not how companies see the offering system. Companies have access to only their own offers and not others';  they will not be able to see other attenders' offers and the best price, unless offers do not get stuck. They will, however, know their rank.
    Lets analyze this chart for better understanding.
-We can see companies' initial offers( Time = 1). Then companies  are able to see their ranks. Company 1 has the best offer and Company 5 has the worst one.
- Company 5 is happy with its offer and being ranked last, since it does not offer better price.
- Company 4, 3 and 2 are aware of their ranks and decrease their prices to be ranked first.
- Company 1 is happy with its offer and prefers hold, since it is ranked first until Company 2 has better offer ( Time = 6)
- Company 4 does not offer better price after Time = 5
- Competition gets hot after Time = 6
- Finally, Company 1 gets the first place, Company 2 and Company 3 gets second and third place respectively.

Interview with Ugur Guntekin (Arda Unal)

Interview with Ugur Guntekin (Arda Unal)

      Today (07/16/2013) Efekan and I had an interview with Ugur Guntekin, Ankara Region Manager at Promena which is the first institutional e purchasing company in Turkey . He introduced the fundamentals of the system and the need for it in the market through starting from 80s. In US and Europe, these systems have generally been used as internal services to buy need. According to Mr. Guntekin, these purchases can be classified into two: Direct and Indirect purchases. Direct purchases are usually purchases of raw materials; for instance, purchases of sugar, flour and dried fruits are direct purchases for a company that produces chocolate, confectionery and baked goods. Indirect purchases on the other hand are purchases of supplementary materials and services such as logistics, alteration and purchases of tools. Mr. Guntekin expressed that companies generally use Promena's services for direct purchasing, if there are multiple companies that produce the product they need.

        Mr. Guntekin also explained that early results of the usage of online purchasing portal were not as bright as expected on the paper. He believes that this arises from the lack of the consulting services. For that reason, they have an experienced consulting team to be able to reach the real potential of the system. They give advices about the appropriate time to purchase and other strategies for more profitable purchasing.

        Their portal offers the concept of quick purchasing besides tender. Companies that need to purchase in small amounts may use this feature to fasten the process. Promena has a universal stack of suppliers from each purchasing process, unless the buyer wants to keep their suppliers private. Each company in the portal has access to their previous purchases. Additionally, if a supplier company wants to take place in the stack, they have to have an invitation from a buyer.

     Their fees are completely variable according to customers. They get commissions from savings, sometimes for each tender; they offer request for information and consulting services for a price. Furthermore, he mentioned about the challenges of this business such as lack of well educated staff in the sales and purchasing department of companies. Especially for construction sector in Turkey, it is very challenging to apply this portal because tender process is so traditional, ossified and close to new methods. Therefore, this transformation from traditional to online portals is slower than expected.

        I believe that whole drama lies on whether we will provide consulting services and will be able to make our way in the market among all these strong competitors and internal purchasing services. 

Interview 2 with Baris Bicimseven (H. Bahar Özer & Bilal Kuru)

Last Tuesday, 9 July, Bahar and I made an interview with Baris Bicimseven. Today, we made another one with him, and he really contributed on our last business model canvas. He already told us golden contributions, today he mentioned about another things;
-He told us about marketing that getting customer is the most critical point and corporate customers does not favor changing their suppliers very often. It is because that as changing suppliers, swicthing costs can break out and it is really high.
-He emphasized the most important point that adopting this software and new tender system can require operational changes and it can cause high switching costs. Hence, we should do a good job in justifying our product's value proposition.
-Moreover, at operational level, compability of our system with other business software (ERP, SAP etc.) may be an issue, however a competitive edge if we can manage to integrate our software with other. This can be challenge for our technical personel.
These are last contributions from Baris Bey. We sent him our last canvas, and he will try to make another contributions as soon as possible.

List of Potential Customers

We have 14 customers. These firms have automotive factories in Turkey:

1. Anadolu Isuzu: Produces commercial vehicles in Kocaeli since 1965. Headquarters are in Kocaeli also. http://www.isuzu.com.tr/MainPage
2. B.M.C.: Produces trucs in İzmir since 1964. Headquarters are in Izmir also. http://en.wikipedia.org/wiki/BMC_%28Turkey%29
3. Ford Otosan: Produces cars in İzmit for 48 years. Headquarters are in Istanbul. http://en.wikipedia.org/wiki/Ford_Otosan
4. Hattat: tractor production company. http://www.hattattarim.com.tr/
5. Hyundai Assan: Production of Hyundai cars is handled in İzmit. http://www.kibarholding.com/sektor/hyundai_assan.aspx
6. Karsan: They focus on public transportation and commercial vehicles. Sometimes they built cars for army if there is demand. The factories are in Bursa http://www.karsan.com.tr/default.aspx
7. M.A.N. Türkiye: Truck and bus production company. The production handled in Istanbul and Ankara. http://www.tr.man-mn.com/tr/_irketimiz_hakk_nda/man_t_rkiye_a._/MAN_T_rkiye_A._.html
8. M.Benz Turk: In Ankara and Aksaray, they manufcture busses and Trucks. http://www.mercedes-benz.com.tr/content/turkey/mpc/mpc_turkey_website/tr/home_mpc/passengercars/home/world/about/locations.0003.html
9. Otokar: Commercial and miltairy vehicles produced in Sakarya. http://www.otokar.com.tr/en/
10. Oyak-Renault: Factories for Renault cars are in Bursa. Headquarters are in Istanbul. http://www.otokar.com.tr/en/
11. Temsa Global: Produces vehicles for public transportation in Bursa. Offices are in Istanbul http://www.temsaglobal.com.tr/tr/default.aspx
12. TOFAŞ: Produces cars and semi products for Jeep, Ferrari, Ford, Dacia and Maserati. Factories are in Bursa, management is in Istanbul  http://www.tofas.com.tr/en/Pages/default.aspx
13. Toyota: Toyota cars are factoried in Istanbul. The offices are also there. http://www.toyota.com.tr/
14. Türk Traktör: The production and management facilities in Ankara. http://www.turktraktor.com.tr/

Most of companies are managed in Istanbul or near Istanbul. Our Company should be establieshed in Istanbul for that reason.


Efekan Güven

Interview with Mehmet Güner (Efekan Güven)

Mehmet Güner is currently STG manager of IBM in Ankara. Honestly, he is my manager :) STG is for Systems and Technology group and STG sells system x servers, power microprocessors, storage systems and pure flex servers. Mehmet Güner graduated from METU, the Department of Business Administration. he worked for KocSistem as Group Manager for more than 14 years, then he became Sales Manager in Siemens. After that he was elected as assistant general manager at Cisco. Finally, he is in IBM as STG manager. He has so many experiences with procurement process and software sales. I tested so many hypothesis of us like our target market and subscription model. After the interview, I was like "OMG! let's change everything again!". Because our hypothesises have failed again. Not everything was that much pessimistic about us. He clearly understand what our product is and why it is good for customer. He told me our main VP without waiting my explanations. Let me explain his advices and feedback:

First; he offered that we should not work with universities. Because they make standard procurements and and they procure products that have little variety. Rather than that; we have to work with factories or merchandise product manufacturers. Besides, the product should be complicated and should be produced by using so many raw material and semi-products. Those sectors target economies of scale (minimum average cost) and the prices in that sectors depend on the country that you import the raw material, daily changes in economy and the connections of the importer. Therefore, taking prices from so many companies that has different global connection would attract these sectors. I directly asked for a sector name and he replied with white goods and automotive sectors. I pushed him upon automotive and he continued. He said ford purchases carburettor more that one companies. It is just one of the thousand pieces of a car. Ford factories in Bursa can enjoy our offer since the prices are changeable among different suppliers from different parts of the world. Besides; financial evaluations will e more practical with an online bid interface. It is easy to evaluate costing criterion.

Second important point is about revenue model. He said you have to supply know-how services to apply subscription model; because that is how software sector goes. However; we cannot sell know-how according to him. The reason he explained is critical. We cannot know about automotive more than the guys in that sector. We have to knnow where to stop; we are just software sellers. The I asked how software guy make money. The answer is taking money from UPGRADES, INITIAL PRICE and CUSTOMIZATION. By customization; he means different requirements of different customers. For example, some might have transportation unit and some might be outsourcing transportation services. Different requierement will cost to customers.

Efekan Güven

GOB - presentation of week 5

GOB-Garaj Presentation

Business Model Canvas - version 5

Second best answers

As our professor said; the second best answer that we can hear after the contact requests is "No". Let's see how many second best answer we got untill now:

• 4 guys form Promena
• 1 from Kamu İhale Kurumu (Public Procurement Authority)
• Owner of a logistic company
• Marketing Manager at Coca Cola
• 1 manager at IBM

Totally 8 (additions will be made after my friends' updates)

Note: We will not reveal their name. The list will be updated after getting new "no"s.

Further Talk with Akın Yağız (Cem ÖMEROĞLU)

This week I made a beneficial interview again with Akın Yağız who is working at purchasing department of Bilkent University.  He mentioned that they really needed such a project, like our project. He said that university has the list of some companies which are providing the all needs of university. And, “this list has not been changed over more than a decade. Thus, one of the most crucial things that the project will be offering us is to access a variety of corporations. Since, the advantage of competition among corporations and with the aid of this variety, we will be able satisfy the needs of university at reasonable prices which are mostly lower market prices. The second advantage of the project is saving time. Besides, when university needs something, we inform the all companies, that in the list, about the needs of university and then waiting for their proposals. This process takes at least one week. However, with the help of the project this time will take at most 2 days. Since, the all operation relating with tenders will implement via the web-site. We will not need sending information letters to companies. Therefore, we will be able to reduce our cost. Lastly, this kind of project will be so beneficial for us.”  

Interview with Baris Bicimseven (Bahar Özer & Bilal Kuru)

Baris Bicimseven, who Michael introduced us at the beginning of the course, works at Turkish Custom. As the members of the GOB Team, Bahar and Bilal, we spoke with him about our business model, and sent our canvas to him. He responsed our request and made appreciated suggestions for our business model;

-He would suggest that we should study the legal framework for government tenders about our government customers. In Turkey, they are stictly regulated and the government agencies are given very little freedom in their tenders. That is to say, altough our proposition is valuable and the system we founded is straightforward, it may not be good and fit operational environment of government agencies.

-He also recommended that we should analyze the competitiveness of our system very carefully. Let's suppose that there will be a lot of competition out the system, in the market, providing similar services. We should think about how to differentiate our service from potential competitors. What will be our market entrance strategy? 

-The another critical point he emphasized could be the training of new customers. Time, effort and also money are required to get familiar with new software. Our training and support team should be excellent. It is because this is not their usual business for potential customers. They will be able to easily use it whenever they really need it. Therefore, all the system, its usage and utilization it provides should be easy and carefree.

So far, his recommendations are these. We will try to schedule a new interview with him in the upcoming days.

Thank you a lot Mr. Baris

H.Bahar ÖZER & Bilal KURU

1 article and 1 blog to check

Hi guys,

I was surfing on internet for e-bid and found 1 turkish blog and 1 article. I promise that it will be helpful to check them.

http://spendmatters.com/research-library/perspectives/preparing-for-procurement-in-2020-negotiation-contract-and-supplier-information-overload/

http://blog.promena.net/

Spendmatters focuses on the following solution areas and the companies within them: eProcurement, e-invoicing, P2P, group purchasing organizations (GPOs), leveraged buying/leveraged contracts, supplier enablement, supplier networks, supplier information management, vendor management, supply chain risk, services procurement (general), services procurement (category specific), vendor management systems (VMS), managed services providers (MSPs), supplier risk, e-sourcing, strategic sourcing, contract management, spend analysis, savings implementation and supply chain management (direct materials demand aggregation, multi-tier visibility, planning and forecasting). They focus on so many things, I do not know whether we can say that it is focusing :)

All entries of the promena blog were posted by Ufuk Gedikli. I tried to contact him. I hope he turns me back for an interview. Because He is business development manager at Promena. promena is the same software system we offer to customer. The difference with promena is that it is only served to the companies of Koc. They do not sell it to outside world. Besides they offer different services near online bidding organization.

In addition to those; the website of Central Finance and Contracts Unit of Turkey (CFCU): http://www.cfcu.gov.tr/
It is good to know the procedure.

Efekan Güven

First Screenshot of Our Application

This is the first version of our graphical user interface. Obviously, there are many features that will take their final forms after feedback of customers. More screenshots on the way.

Arda Unal

Second Version of the Diagram about what We Learned so far

Color Code: Blue nodes are from the older diagram
                    Other colored nodes are recently updated ones
Arda Unal

First Version of the Diagram about what We Learned

Arda Unal

Interview with two Officers working in purchasing department of Bilkent University (cem ömeroğlu)

this week, I interview Akın Yağız and Murat Kokuoğlu who are working in purchasing department of Bilkent  University. I mention our project to them about the advantages and the disadvantages of the project for themselves if they use such a system. If there is such a system,they said that it will not create any disadvantages to them, othervise it creates advanteges to them;

• it decreases the work load.
• it decreases the responsibilities of them
• it reduces the cost
• it increases the competition

Every month, they sends about 200-300 letters to their customers to give information about their needs and bids, so it causes waste of papers. Also, it increases the cost. If they use this project, there will not be such a cost. It increases duration of  biding process, but in our project,  all the issues will be based on the internet so there will be time saving and the work will be done in short time.

Business Model Canvas - version 4

Pre-interview with Mehmet Ziya Telli and Some Changes in Canvas (Efekan Güven)

One good and one bad news with my scheduled interview. I would make an interview with Mehmet Ziya Telli, who is manager in IBM for 20 years and works for the company for more than 30 year. He played different roles in tenders as an authority or attending tender. He has relationship with so many SMEs and universities thanks to meeting their procurements and working with them. I would ask questions for the issues to specify our value propositions according to specific customer needs. We postponed our interview to thursday. I wanted to make it untill tomorrows presentation. This one was the bad news and the good news is we have already made a pre-interview last week. I did not post it to the blog; since I waited todays meeting. From our pre-interview, I learned some points.

I divide the value propositions into two parts: Main value propositions and side value propositions. We will be selling the product by promoting the main VPs. Our product will be designed based these. But the side ones will be considered; but we will focus on them less. For example; I can sell reduced cycle time and simplicity of tendering process with our product. However; it will be rude tı say that you will never face with bribery in your university.

Taking percentage of customer savings... I was not sure about that revenue account also. Because the bottom prices will be decided by customer and the customer may not act honest with the savings. Besides, if our system works; the bottom prices will be shaped by our system. Therefore, if the normal of the market will be our price, that means no saving with the system. As a result, we cannot depend on that revenue account.

Our customer segment is universities in Ankara; but could not discuss it with Mehmet Ziya Telli. But it will be discussed for sure.

WHY UNIVERSITIES?

Because they procure so many services ad goods from other companies. Cleaning, security, transportation, staitonary etc. are some of them. In addition to that, universities are open to that kind of changes. Their organization make more dynamic replies to software transitions and changes.. The employees of universities are more trained also. Universities could be good start for us. When they open the bid online, the attending tenders will have to use this system also. But we will not force them to use the system. We will be in touch with them also and they will be persuaded to use our system. They will believe the good sides of the online bid interface. To make sure that, we have to built our product according to their needs. We have to talk with them and we have to listen them after asking right questions.

By the way, I learned some good terms aboud bidding process. Let me share them:

• Attending tender: The one who enter the bid
• Authority: The one who open the bid
• Bidding process=tendering process
• Bid=tender
• Tender document: Document that includes list of conditions and needs of authority
• Technical specifications: Tender document that includes technical detailes of needs

Efekan Güven

2 articles concerning corruption

I recently read two articles concerning corruption, bribery, cleptoracy and frauds.  Since; with our product, we are willing to decrease those corrupt activities during tendering , which is one of our value propositions also, those articles could help us to have more detailed information about them. By this way, we could find stronger propositions about them. You should check them. Here are the links:

http://www.giaccentre.org/why_corruption_occurs.php
http://www.giaccentre.org/how_corruption_occurs.php

Efekan Güven