How Optimization in eSourcing Saves Time
You may think back to the decades-old methods of procurement when you dealt with bidding and suppliers by phone, printouts, and filing cabinets. For most who are part of procurement management, those days are fading away. However, that doesn’t necessarily mean the process is streamlined. Further— managers are resistant to certain newer eSourcing methods, believing that eSourcing optimization isn’t needed to enhance their procurement process. Those are myths.
User-friendly optimized eSourcing platforms can help you through every step of the procurement process, from start to finish.
What Can eSourcing Optimization Do?
The way to answer this question: there is very little that eSourcing optimization cannot do for your procurement process. It can essentially take you from Excel hell versus scenario heaven. If you’re tired of struggling with endless spreadsheets, eSourcing along with Optimization solves your problem. It essentially streamlines all the sourcing steps for you and can automate many of them, too.
Beyond that, with optimization, creating award scenarios can now take minutes or hours versus days or weeks on the calendar. It is the digital equivalent of everything you’ve done in analog form for years.
How Does eSourcing Software Save Time?
You may wonder how this software is in charge of incorporating business rules in eSourcing optimization, and how it is able to save you so much time. One of the main ways eSourcing saves time is that it offers you the ability to copy the same, or similar, tasks and repeat them in an automated manner.
You can copy similar events and tailor them to a new situation over and over again. While this saves time because you do not have to create a new draft every time, it also saved time later in the process when it delivers side-by-side comparisons once bids and answers are saved by bidders.
Bid Award Optimization: Explained
When it comes to bidding and bid award optimization, it is on the shoulders of the suppliers to place their bids, and you can make a choice within one to two hours instead of three to four weeks. This drastic time-saving measure makes dynamic eSourcing and auctions more preferable than the drawn-out traditional negotiation done via email and Excel. Plus, it allows you to gather bids from more suppliers, thereby creating more competition and increasing savings with lower bids.
Other eSourcing Optimization Myths
Even though eSourcing optimization and software can drastically save time and money, still, many are skeptical. Some even ask, does incumbency matter in eSourcing? An incumbent supplier does still matter and eSourcing optimization can quickly and easily show you the sensitivity of switching and a host of other factors that may matter to you. Things like the number of suppliers in total, per plant or region as well as other things like maximizing Diversity or “Trusted suppliers” without compromising savings.
Many people still believe they can find higher savings on their own using pivot tables or other Excel formulas and tools. Savings found using homegrown methods might be close to the same as with eSourcing optimization (within 5% in some cases), but it will have taken 10 times longer to find and qualifiers like incumbency, diversity, or trusted supplier might not have been considered to the same extent. Not to mention the sleepless nights in Excel hell.
Another complaint is that the eSourcing platform isn’t as good of a negotiator as the human negotiator actually working for the department. While this is a valid concern, eSourcing optimization is typically used as a complement to the human negotiator—not a replacement. You can configure the software to facilitate work for you.
An additional complaint is that the eSourcing software is too complex and in some cases, this can be true. However, with next-generation solutions like ours the learning curve is much less than before. However, once you get out of Excel hell, you’ll be thankful that you learned how to optimize your sourcing process for your use case.
For more information about eSourcing optimization software or if you’d like to request a demo, contact EC Sourcing Group today at 973-936-9672.