Strategic sourcing and procurement are two words that should always be spoken together, as sourcing is perhaps the most important aspect of procurement.
Procurement optimization has become vitally important in recent years, as software has given us the ability to speed up the procurement process overall, particularly strategic sourcing and the award selection process.
However, you should always ensure that you’re using strategic sourcing best practices and utilizing the best tools available. Not all strategic sourcing software is created equally—so what are the must-haves when you’re shopping for software? Read on to learn more about the importance of strategic sourcing, the primary benefits of strategic sourcing, and what features you should be on the lookout for.
Strategic Sourcing and Procurement: What Does Strategic Sourcing Mean?
The strategic sourcing definition refers to the process of procurement that is concentrated on negotiations, contracts, spend analysis, data collection, and market research. So as you think about strategic sourcing and procurement and what type of strategic sourcing solutions you need, you would look for software that aligns with meeting those goals. You want to look for tools that go beyond just contracts and negotiations; the best strategic sourcing software will offer a host of tools to help you make the best decisions for your company, including the best award selections.
Strategic Sourcing and Procurement: The Benefits of Strategic Sourcing
Both you and the supplier can benefit from strategic sourcing, in part because the right strategic sourcing tools will be collaborative and transparent in nature and will help foster good relationships. Like any other automation tool for eProcurement, software used in strategic sourcing can certainly save time. But there are other benefits as well, such as:
- Risk management. The right software can help you evaluate supplier relationships and manage risk much more effectively.
- Curb spending. When you run spend analytics software, you can see where all your spend and reduce savings leakage and rogue spend as well.
- Efficiency. Using the right strategic sourcing tools and techniques can save more than just time. Having all your team on the same page will boost efficiency.
Strategic Software and Procurement: What Tools Should I Look For?
When it comes to strategic software and procurement, your software should accomplish certain things beyond being on the lookout for current trends in strategic procurement management.
The six things your strategic software and procurement tools should have are:
- Spend analytics. You need to be able to run reports to know exactly what is being spent, by supplier, and which areas of your organization are byuing.
- eSourcing. This is the backbone of strategic procurement solutions, including RFx software (RFQ, RFI, RFP, etc.)
- Award optimization. This helps streamline the supplier selection process after all bids have been received.
- Contract management. You might need visibility into important contract dates, supplier compliance, and other things in a contracts repository.
- eProcurement. This is the other half of your strategic software and procurement absolute must-haves. Here, you’ll have invoice management, PO generation, order status tracking, etc.
- Collaboration and workflow management. This is to keep your team on the same page at all times.
- Mobile access. More importantly than ever, your eProcurement software needs to be mobile-friendly.
There is always a short period as you learn a new system, but as you become more familiar with the tools, your new strategic sourcing experience will become much more seamless.
To learn more about strategic sourcing and procurement tools, or to request a software demo, contact us at EC Sourcing Group today at 973-936-9672. We want to help you reimagine procurement.