3 reasons why your organisation should start using eSourcing
If procurement begins with sourcing, then procurement professionals need a system in place that drives effective decision-making when planning sourcing. Yet it is all-too-common for the planning to go out the window when urgent sourcing requests are placed that need fulfilling ASAP.
This shifts procurement teams into a reactive mode where structure and long-term planning are all but forgotten. Add an increasingly complex network of vendor relationships and geographically dispersed delivery locations to the mix, you have a considerable challenge on your hands. How can procurement teams perform sourcing in a way that stops them being pulled in multiple directions, keeping the ship on a steady course?
1 – Use digital sourcing to build better procurement plans
You can’t make a plan if you don’t have all the relevant information to hand. According to KB Manage, eSourcing refers to: “Internet-enabled applications and decision support tools that facilitate interactions between buyers and suppliers through the use of online negotiations, online auctions, reverse auctions and similar tools.”
Digital eSourcing systems are a great place to plan short-term and long-term procurement needs, vendor availability and capability, and costs. The next time you receive specifications for an upcoming tender, you can leverage this bank of structured data, predict upcoming expenditure, and decide on the right vendors to take part in the work.
This strategic approach to sourcing is only possible when the procurement process is digitised. Without it, it becomes increasingly difficult to plan the allocation of resources and expenditures over the long-term, which may lead to stockpiled inventory and unnecessary retainer agreements with vendors.
2 – Balance strategic planning with tactical sourcing
In a perfect world, it would be possible to plan for every eventuality and leave nothing to chance. This, however, is not the world we live in. Unexpected events such as damage repairs, supply chain issues, and global events that change economic variables all mean organisations need to remain agile when sourcing.
E-Sourcing systems let procurement teams take advantage of their solid strategic base by allowing them to make tactical adjustments that still benefit their long-term business goals. In short, they can prioritise actions, inventory and vendors that are the closest fit for their strategic needs. Secondly, digital eSourcing systems boast a range of templates that can be used to rapidly create new tenders. These can be created with all relevant parties notified, allowing procurement teams to move into the contract phase much quicker than before.
3 – Leverage exponential technologies
Finally, Machine Learning (ML) will soon deliver a whole range of new capabilities to procurement teams. Building off already-enriched data sets, eSourcing systems will soon be able to automate the entire process of planning sourcing for the upcoming year, building custom tenders to meet strategic and tactical needs, and identifying shortlists of vendors most suitable for the job.
This automation will free procurement teams from a huge chunk of administrative work, leaving them free to consider the most important elements of the tenders and handpick the vendors they wish to work with. As time goes by, the system will be able to deliver increasingly smart, efficient, effective tenders, increasing profitability and value creation for all involved.
With up to two-thirds of all company expenditures arising from procurement, it is essential that organisations have a transparent view into where money is being spent and what value is being delivered. A shift to eSourcing will help procurement teams drive their businesses forward, forge stronger relationships with their vendors, and make better plans for the future while remaining agile in the present.
Interested in digitalizing your sourcing? Find out more from our one-stop guide to eSourcing!