For most startups looking to disrupt an industry and introduce innovative, new ways of doing things, the market they are disrupting is usually a traditional sector, where technology has made limited inroads. It is relatively rarer to see a tech startup disrupting a tech industry and that too, where the established players are giants like Oracle and SAP.
That is precisely what the Lahore-based tech firm, Khareed is attempting to do with its software as a service (SaaS) e-procurement solution.
For decades, business owners and managers in Pakistan have expressed their frustration with the challenges of procurement—from having to continually haggle and negotiate to get reasonable prices to the tedious and time-consuming tasks of sourcing vendors, comparing prices, and maintaining records. Many have turned to technology to help manage these challenges: According to Deloitte, a consultancy, nearly half of all top global chief procurement officers are recommending investing in cloud solutions to help support their procurement organisations.
Among Pakistani companies, the use of technology in procurement has been primarily confined to the use of the procurement modules in ERP systems provided by companies such as Oracle and SAP. However, these solutions are designed mainly for companies in developed markets: They are expensive, charging hundreds of dollars per user, require lengthy implementation and user training, and have features and functionality that are not relevant for local users.
Companies continue to manually request price quotations, physically source products, while their expensive ERP procurement software becomes relegated to being a tool for data recording.
What is Khareed
This is where Khareed ambitiously aims to disrupt the industry, with an affordable e-procurement solution tailored for the local market. “At the core of a good procurement function is the process through which you request competitive price quotations,” says Khareed CEO, Haroon Sethi. “If your procurement software isn’t facilitating you in making your requisitioning easier, it’s not saving you much time or money.”
Users of Khareed can generate a request for quotation for any product they need, and at a click, submit it to multiple vendors. Instead of sending out ten different emails, users save time by creating one request and inviting bids against it.
How does it work?
Where Khareed is different from other e-procurement solutions is its design as a two-way communication channel between buyers and sellers. Procurement teams can submit their RFQ to vendors of their choice, and the vendors respond with price quotations directly into Khareed’s system. Users can view and easily compare multiple price quotations without having to do any manual data entry or data manipulation themselves. A built-in messaging system also allows companies to negotiate directly with vendors and bring prices down further.
The result is a wholly automated price comparison and documentation tool which helps companies save time in both requesting and quote analysis. Khareed claims the proper use of the system can reduce the procurement process by nearly 60%, saving valuable time and resources. Transparency and documentation are additional benefits.
“While the system will help get you competitive prices and give you some cost savings, that is not the main value we offer,” says Sethi, when asked how much companies can save in their buying costs. “Competitive tendering, when done right, usually yields savings of about 4-7%, and that’s what we see on transactions done on Khareed. But most of our clients are already doing competitive sourcing, albeit manually. The value we bring is in making it easier and more convenient for them.”
The emphasis on comfortable and convenient is evident from the application, which has been painstakingly and iteratively designed over two years taking market and user feedback into account. The usability of the interface is intuitive, with clearly labelled functions and linear process flow.
“If you can use Facebook or Linkedin, you can use Khareed,” says Hamad Malik, the lead developer behind the application. “This is made for the everday user in Pakistan—no training is required, just log in and you can start.”
The company markets its usability with its tagline “Enterprise Procurement, Retail Convenience,” referring to their e-commerce style online marketplace which users can browse when identifying specific products they need. The interface resembles an e-commerce site, but the products are not mobile phone accessories and apparel, but bulky equipment and office supplies.
A number of the more technologically savvy large corporate enterprises, such as Pak Elektron Limited, Atlas Batteries, and Treet Corp are already using Khareed for their non-strategic procurement. However, Khareed continues to target mainly small and mid-corporate players, pricing its entry-level package at Rs 10k per month. “We want to work with the companies for whom ERP systems are too expensive or too complex for their needs,” says Sethi.
More information about Khareed and its offerings can be found on their website:
www.khareed.pk and at www.khareed.pk/prism-procurement