What to Look for in a Procurement Optimization Solution
Finding the right procurement optimization solution is imperative to keep your entire procurement management process running smoothly throughout the supply chain. Much of your optimization will be accomplished through the strategic sourcing process, one of the best ways to keep things optimized and seamless.
In addition, having the right strategic sourcing tools and techniques at your disposal will allow for more transparency, more collaboration between you and your suppliers and your team, and in the end, provide better efficiency and a boost in your ROI.
Read on to learn more about strategic sourcing techniques, how to make them part of your procurement optimization solutions, and what strategic sourcing best practices to focus on along the way.
Procurement Optimization Solutions: What Does Strategic Sourcing Mean?
Terms can always be confusing, and people have often confused strategic sourcing with doing business with your strategic suppliers. However, it is quite different from that. The strategic sourcing definition reads something similar to, “Strategic sourcing is a process in procurement that uses analysis, data collection, market research, negotiations, and contracting.”
Much of the strategic sourcing methodology aims to increase efficiency and lower costs by looking at research and analysis drawn up by reports. It can help you make more confident, informed decisions on how to proceed as a company when sourcing. Strategic sourcing software combines all of these features into one suite, making it easy to compare and contrast.
Procurement Optimization Solutions: The Best Strategic Sourcing Software
If you’re looking to improve your procurement management with the best strategic sourcing solutions and truly optimize your supply chain, you must also have the right software. There are some features that all sourcing optimization software should have, so be sure before you buy. These strategic sourcing tools include:
- Spend analysis. This is one of the must-have features, so you know your spend by category by location by supplier, etc. . This also helps identify any maverick spend, decreasing costs, and improving efficiency.
- RFx software. You should easily create requests for information, quotes, and bids, with nothing more than the click of a button. And suppliers should be able to access and answer these requests easily
- Award Optimization. This helps you select the best award scenario for your specific situation. Typically this means balancing costs, switching, and operational requirements. This task could take days or weeks to perform without award optimization, and you might overlook some easy savings.
- Contract management. These features handle the creation, execution, and management of contracts.
- Supplier management. This helps you onboard any new vendors and capture information requests from existing vendors as well.
You may also want to look for procurement optimization solutions that are of most benefit to you, with features such as integration into your current accounting software,
Procurement Optimization Solutions: The Primary Benefits of Strategic Sourcing
There are not many drawbacks to the strategic sourcing experience and there are many benefits to strategic sourcing. The importance of strategic sourcing is that it primarily boosts efficiency through its automation. However, it does have other benefits as a top procurement optimization solution. Other benefits include:
- Less risk involved (because of all the strength of procurement and award optimization that minimizes your operational risk)
- Creates long-term supplier relationships
- Reduces both indirect and direct costs (which leads to better ROI)
- Happier internal stakeholders (because of their easy involvement in the process)
To hear more about procurement optimization solutions or request a software demo, contact EC Sourcing Group today at 973-936-9672 to speak with a team member. We want you to re-imagine the way you think about procurement.