It’s estimated that approximately 90 percent of businesses use some procurement strategy to acquire goods and services. However, not everyone is using eSourcing software — a cost-effective, efficient way to source. Yes, you could source using manual processes, spreadsheets or the old back-and-forth method, but you wouldn’t be doing your company any favors. Instead, the right eSourcing tools and software can streamline your sourcing process, saving you money, amongst many other benefits.

Read on to learn more about the ins and outs of eSourcing software, solutions, and what features to look for when choosing a solution to suit your needs.

eSourcing Software: So How Does This Work?

e-Sourcing is an important piece of the overall procurement management puzzle and plays a vital role in the supply chain. It’s a web-based platform, but not all software is created equally. Some functions you can perform using eSourcing software include:

  • Conducting auctions – This includes reverse auctions, Dutch auctions, and Japanese auctions, amongst other auction types.
  • Conducting RFx – This can include an RFI or RFP. Advanced eSourcing tools will have these features available.
  • Contract management – This offers a centralized platform for easily managing your contracts.
  • Spend managementKeep track of your spend with spend analysis tools included in your software.
  • Supplier management This allows for transparency and the ability to see the profiles of current and potential buyers.

Automating e-Sourcing tools and procurement software allows you to streamline your overall process, bringing structure to all aspects of the supply environment through reduced deliveries and the reduced need to process those deliveries, ultimately benefiting your overall supply chain.

eSourcing Software: Allows for Best Practices

One of the most important benefits of eSourcing software is that it allows for best practices. While your goal is the acquisition of goods or services, how you conduct sourcing and your relationships with suppliers are vitally important. eSourcing software is set up to be transparent. This allows for better collaboration, not only between you and your team but your suppliers as well. 

You may encounter situations where suppliers are wary of eSourcing or eAuctions/reverse auctions, but the truth is, eSourcing will benefit them, too. First, it allows you to form trusting, rather than adversarial relationships. That may not be enough for some suppliers, so you can also outline these benefits of eSourcing tools for them:

  • Levels the playing field. If you’re conducting a reverse auction with your software, this gives smaller suppliers a chance to throw their hast in the ring.
  • Transparency. Using your eSourcing dashboard, you can set clear expectations for potential suppliers instead of being caught in a back-and-forth to acquire what you need.

eSourcing Software: Quick and Efficient 

Previously, an analog sourcing method would take days or even weeks. The process of reaching out to suppliers for quotes, waiting for responses, then making a decision was laborious, time-consuming, and frustrating. Spreadsheets are used to organize data but are complicated, inefficient, and not user-friendly.

eSourcing software completely streamlines this process. In addition, robust features built into the software benefit both you and your suppliers.

This ease of collaboration between buyer and supplier is crucial. Your team and your suppliers can access the web-based application. Therefore, there is no more guesswork.

For example, everyone can log in and see the status of an RFP. This allows for transparency and clarity for all, with less wasted time communicating updates back and forth. eSourcing software also gives you access to find new suppliers that can potentially better meet your needs. 

While you may already have a group of go-to strategic suppliers, you can use eSourcing software to allow new suppliers to make a bid for the businesses, as discussed before. In the case of a reverse auction, it’s not only about price—you may find a supplier that goes above and beyond to exceed expectations. Again, this can happen due to the transparency your software will bring to the process. Another added benefit is that your templates and other documents will be neatly kept and organized thanks to your eSourcing software’s centralized management platform.

Need to get quick information about a supplier? With one look into your supplier portal, you can see your entire history. Is this the right vendor for you? You can easily see past contracts, interactions, and other information in order to make an informed decision. 

There is also vendor competition to consider—depending on what e-Sourcing solution or auction you’re running, you often get a better price due to increased participants and supplier competition.

eSourcing Software: Robust Features

It is most definitely the features of e-sourcing software that make the difference, so be selective when making your choice. More features will improve your procurement process within the supply chain. Some of the features you should be in search of include:

  • The ability to conduct online e-auctions. This should be included in any eSourcing software, but make sure you can conduct different auctions for different purposes (reverse, Dutch, Japanese, etc.)
  • eRFx capabilities. This means you can have the ability to perform RFI, RFP, RFO, etc.
  • Supplier management software. As previously discussed, this feature allows you and your team to look at current quotes, contracts, and history.
  • Spend analysis software. This should be part of any procurement suite you own, but incorporating it in your eSourcing is valuable and beneficial in identifying rogue and maverick spending and ways to improve.Image of an employee at a desk for an article about Why You Need eSourcing Software
  • Automated PO process. Like other features within your eSourcing software, the ability to automate POs is crucial. 
  • Contract management. This is an equally important business process, along with supplier management. This allows you, your team, and your buyers to see contracts and other information in real-time.

One last consideration when considering an eSourcing software solution is to choose one that is intuitive for your team to use. A large learning curve can hinder the efficiency you’re trying to create. There are several on the market that are powerful, effective, and provide a user-friendly experience.

Ready to learn more? Contact Simfoni today for a consultation.