A procurement department is often seen as the part of the company that only needs to contain cost increase. It shall not demand any investments. Thankfully things have changed: more and more procurement departments of all sizes are seeing the need for innovative eSourcing technologies to join in on an organisation’s larger plan to optimize the supply chain and be more efficient.
eSourcing is the process of using the appropriate web-enabled, collaborative technology to facilitate the full lifecycle of the procurement process for both, buyers and suppliers, anywhere, anytime, to enable better outcomes than from traditional negotiations.
So why invest in eProcurement?
1. eSourcing speeds up the process and leaves time for more research to improve procurement.
Ensuring cost containment is the main goal of any procurement team, but with daily routines and poor quotation management through e-mail and spreadsheets, how can you possibly be sure of achieving any goals and set aside some time to:
• Study your suppliers’ territory?
• Address quality issues, order delays, “last-minute” price increases?
• Look for and assess new, cost-effective and quality suppliers?
An efficient, cloud-based e-sourcing system can save you valuable time, allowing to quickly make complex and technical quotations, running auctions automatically, send it to any number of suppliers within minutes and even start the supplier development process with stakeholders to market, with automatic and customizable RFIs.
2. eSourcing enhances collaboration in the supply chain
You can extends the reach of suppliers while sharing the information and building quotations within your team from around the world.
eSourcing can deliver transparency and communication between buyers and suppliers – from anywhere to everywhere. You can share information and build quotations with your team from all around the world; you don’t have to follow-up because it usually makes it for you in the language you choose. You can easily compare responses, set deadlines, whilst attending all possible compliance rules. And contract management tools won’t make you forget your agreement deadlines.
On the other hand, suppliers can also see their prospects with their current statuses and the outcome in a clean dashboard.
3. eSourcing gives visibility to cost savings
A challenge for procurement departments is the visibility of achieved “real” savings, which can only be obtained through careful planning, tough negotiating, agreement by all parties, tracking, and at last, they are reported and compared.
Without a good system, to obtain continuous savings that contemplate the entire process listed above, it would take more than just one person or have a person not working at full potential!
Now imagine you can have a map where you can clearly see the taxes you’re paying by region, or where the taxes are cheaper and ask yourself: Do we have potential suppliers there? Can we leverage the volume of suppliers from that specific regions? Do we have other regions’ facilities producing and selling similar products? Can we standardise parts? Leverage volume between regions? Share expertise? Do other departments run quotations, buy services or other things without Procurement consent? Are Indirect Categories a pain for you? Can we improve Contract Management?
If you have the right eSourcing tool, this should all be a piece of cake! In Procurement we need to be Super Heroes, we are involved in everything, pressure is unbelievable, economy is a mess and we can’t expect to be highly productive without the support of technology; otherwise, we only survive, but never fully succeed!
Welcome to the new Procurement era!
Isabela May, Strategic Sourcing Specialist at NeoGrid