These days most suppliers know their way around an e-Procurement tool. e-Procurement streamlines all processes for everyone, no matter which side of the deal they are on. It simply makes things more efficient and connects everyone across the same platform for ease of communication and reference. e-Sourcing is one of the more important aspects of e-Procurement. In short, it is the process of using web-based systems to collect and collate data about multiple suppliers. With that data, a buyer can make an informed purchasing decision. e-Sourcing technology assists businesses to generate savings, increase transparency and streamline processes and functions. If you’re reading this, you probably understand the importance of strategic sourcing, but are you taking advantage of the best sourcing tools for procurement?
How does e-Sourcing work?
e-Sourcing encompasses the entire purchasing process from:
- inviting potential suppliers to tender
- requesting and collecting supplier information
- bid management process, and/or holding eAuctions
- analysis of responses
- finally, awarding suppliers with a contract and managing the deal to completion
There are three main procurement sourcing tools that are must-have solutions to take your strategic sourcing to the next level. After all, without technological assistance in this digital world, can we really call sourcing strategic?
The Benefits of e-Sourcing for Suppliers and Buyers
1. Transparency through technology
Most e-sourcing platforms provide real-time responses and feedback via itemized ranking and analytics tools. This means that not only do buyers obtain a full picture of where their vendors and suppliers stand, but vendors also get unprecedented competitive intelligence.
2. Levels the playing field for all suppliers
E-sourcing platforms ensure that all suppliers have equal access to the same information about different buyers. This equal access promotes fair play among all participants and guarantees that everyone can access the same answers and questions. By removing bias from the procurement process, e-sourcing ensures that buyers get the same bid options from different suppliers.
3. Improves trust between suppliers and build relationships
Here’s how the typical procurement proceeds when done manually.
- Purchasers start by briefing vendors about the details of their inquiry
- Suppliers return with offers
- Buyers negotiate bids from different supplies
- The purchaser presents the pricing offered by supplier A to supplier B
- Suppliers also typically present the pricing offered by buyer A to B
The manual procurement process is tedious and tends to foster an adversarial relationship between buyers and sellers. In addition, while purchasers may end up with their desired bids at their preferred prices, vendors may feel short-changed. This is not a good way to sparkle a healthy working relationship – especially one that involves supplies and deliveries. This is a problem that e-sourcing handles easily. When using an e-sourcing software solution from a specialty vendor, it’s the market that shapes the price, and because it is out there in the open, it can’t be pinned on a particular purchaser’s or supplier’s negotiating skills.
4. Saves time for all involved parties
There’s always a lot of delays and consultations when it comes to procurement processes. Briefings alone can take hours – if not days – out of already tedious and busy schedules. And that is excluding any preliminary negotiations. Allowing both suppliers and purchasers to access similar templates and collaborate via a centralized system can drastically streamline the entire procurement process. The e-sourcing software provides centralized access to important vendor information and supplier data that can be used to make informed purchase decisions while saving time.
5. Opens more business opportunities
E-sourcing software not only ensures buyers achieve operational efficiency but extends the ease of use to suppliers as well. Once they are familiar with how the entire suite works, it’s easier for them to join bids with your company and therefore stand to win potential business. Therefore, e-sourcing software creates a level-playing field and opens up new business opportunities to involved parties.
Must-have sourcing tools for procurement
1. e-RFX
e-RFX is one of the most common acronyms in procurement profession, but it doesn’t actually stand for just one thing; it is a general term for a range of acronyms referencing a request for information of some kind. Request for (RF) Information, Bid (B), Quote (Q) or Proposal (P), or the generic any of the above (X). e-RFX software helps you to manage all these requests and the responses in a consolidated, easily referenced and comparable format. Historically, RFX would result in a response of disparate data in a range of formats and necessitate physical storage and a lot of man hours to extract the relevant information. Optimization of the strategic sourcing process and minimizing paperwork and administration is always a welcome benefit to your procurement teams, and your bottom-line.
2. e-Auctions
Reverse online auctions enable real-time, dynamic bidding between suppliers. The creation of a competitive marketplace drives efficiency and transparency, which leads to downward pressure on prices. The resulting cost savings can have far-reaching knock-on effects for your business, your suppliers and, in fact, the entire supply chain. e-Auction software with the right functionality and customizability can help your organisation realize cost savings of between 18% and 40%, depending on area of spend. Not too shabby.
3. Contract management
Contract management software provides a single electronic repository for all documentation. Removes many of the aspects of physical risk to paper-based contract management, and automation decreases the risk of human error that comes into play when multiple stakeholders have contact with contract generation and fulfillment. Keeping track of supplier data, trends and performance can be the key to establishing long, healthy, mutually beneficial buyer-vendor relationships.
What sourcing tools for procurement does ProcurePort provide?
ProcurePort’s suite of best-in-class eProcurement solutions includes a range of strategic sourcing software and services that can take your e-Sourcing capabilities to the next level. Strategic sourcing is about more than cost savings. The benefits of investment in e-sourcing include: Real-time collaboration with suppliers and internal stakeholders both in the office and in the field. A consolidated data repository with in-built alert functionality that ensures you aren’t missing a contract that is due to renewal and are keeping you up-to-date with supplier performance. Reverse auction technology enables your business to source the best deals in the most transparent and efficient way possible, for you and your vendors. The possibilities for enhancing your procurement processes are limitless.
What Benefits Do You Get with ProcurePort’s Procurement Tools?
With ProcurePort’s procurement sourcing tools, you get to achieve several benefits:
- Centralized data management and easy integration with existing ERP, marketing, accounting, and customer relationship management CRM applications. This easy integration and interoperability improves communication, enhances collaboration, and fosters productivity across different departments – supplies and purchase alike.
- Templates for purchase orders, purchase requests and other requests simplify the speed and creation of approval processes.
- Templates make it easy to create new contracts, modify the existing ones, and incorporate the latest actionable insights for maximum deliberation and negotiation.
- Optimization and automation of low-value tasks free up your staff to focus on more strategic and business-oriented activities.
- ProcurePort’s procurement software is a software as a service (SaaS) solution that keeps your costs low by reducing the need for on-premise hardware, software, and IT staff.
- The modular deployment capability of ProcurePort’s procurement software means that teams can go all-in with full integration from the beginning to the end, or even take a more casual approach depending on how budget and cost dictate.
- ProcurePort’s software achieves process automation that slashes processing times, eliminates human error, and improves the accuracy for time-consuming, high-value activities.
- Process automation and digital data management eliminate paper waste.
- By leveraging ProcurePort’s e-sourcing software, you enjoy reduced cycle times and greater savings for both invoices and purchase orders through a process of optimal purchase. The optimal purchase order process eliminates missing, inaccurate, or incomplete purchase orders.
- Procurement software provides supply chain optimization. E-sourcing and analytic tools by ProcurePort enable teams to leverage economies of scale to secure better cost and pricing terms. The software also allows procurement teams to pursue contract-based and project-based supplier management solutions.
- Real-time, on-demand access to vendor compliance and performance data. This faster access allows teams to rehabilitate or completely replace underperforming vendors and remain actively engaged in promoting strong supplier relationships.
To discuss how ProcurePort’s range of sourcing tools for procurement can help power your procurement, contact us to talk about your current processes and hopes for the future.