Sourcing is an integral part of procurement management and an upstream part of the supply chain, affecting its overall success. Sourcing is the acquiring of goods and services needed to run a business or make a product. 

However, sourcing is more than just acquisition—it also involves seller selection, negotiation for contracts, and evaluation of your suppliers over a period of time. eSourcing is simply accomplishing all these things electronically, and eSourcing software streamlines the path so you can reach your goals. But, what makes the best sourcing software for your strategic sourcing solutions

Not all sourcing software is created equal, and you want to be on the lookout for the software that best suits your needs. 

Read on to learn more about sourcing software and its benefits, the difference between sourcing and procurement software, and the must-have features to look for when scoping out software solutions.

What Are the Benefits of Sourcing Software?

If you’re still stuck in the dark ages of trying to manage spreadsheets, or even worse, a paper trail, eSourcing software offers many benefits, the most prominent being that it saves time. However, there are many other benefits to help improve your strategic procurement solutions. Some of the other benefits of this software include: 

  • Increased transparency. Sourcing software allows for full transparency and insight into the procurement process, not only for your team but also for your suppliers. Transparency also helps ensure internal compliance with procedures and policies.
  • Risk management. With a centralized repository that holds all your contracts and past transactions, you can improve your vendor vetting process with supplier management and make more informed decisions as you evaluate risk.
  • Improves supplier relationships through collaboration. You can strengthen your relationship with your strategic suppliers by transparent sourcing software, fostering better communication and collaboration.
  • Cost-effective. Another main benefit of eSourcing software is that it is cost-effective; this is a result of its other benefits, improving supplier relationships and streamlining processes in contract management and RFx, for example.

What Are the Differences Between Procurement and Sourcing Software?

It’s important to note the differences between sourcing and procurement software. Sourcing is a subtask of procurement, and as a result, the software is much different. Sourcing software concentrates on contract management, supplier management, etc., while procurement software concentrates more on managing the supply chain, looking for cost savings, and monitoring tail spend, among other things. 

What Are the Features of the Best Sourcing Software?

As you peruse eSourcing software, there are must-have features to be on the lookout for to ensure you have software that fits your needs. RFP Management, for example. What is RFP management? It should be an important part of your software. RFP stands for “request for proposal,” and it involves a formal request sent out to a vendor for a service, product, or solution. Your software should have full RFx capabilities so you can also send RFIs and other requests. In addition, you should also look for other features, such as:

  • Spend analysis. A spend analysis example could be centralizing your data, grouping and categorizing by the supplier, and analyzing the outcome. A spend analysis component allows you to make more informed decisions regarding sourcing and spend.
  • eAuction capabilities. Winning in a reverse auction requires some strategy, but it is one of the most integral parts of your software. Ensure the eAuction capabilities allow you to run several auction types, including the classic reverse auction,Image of white question marks on a blue and yellow background for an article about What Makes the Best Sourcing Software?. Japanese auction, Dutch auction, and English auction.
  • Ability to see things in real-time. You should be able to see all functions in real-time, particularly your auctions. This allows you to make decisions on the fly based on real-time information.
  • Contract management. This feature allows you to manage your contracts with your suppliers in a centralized, simple fashion.
  • Supplier management. Solid supplier management features can improve your relationships with suppliers and allow you to evaluate your suppliers’ performance and clearly map out expectations for important factors such as delivery and quality.

Interested in how sourcing software can streamline your processes? Contact a Simfoni representative today to learn more or to request a demo.