Strategic sourcing – Are you reaping the benefits?
Strategic sourcing can never be considered strategic if it doesn’t include e-procurement. E-sourcing has become one of the most vital procurement tools which allows companies to connect with suppliers, screen them and shortlist them, regardless of whether or not they’re present within the same location or during the same time. Strategic sourcing often allows category managers to secure better consequences than from the conventional negotiations. If you’re new to the term e-sourcing, here’s what you should know about it.
e-sourcing – What is it?
Well, the Chartered Institute of Procurement and Supply defined it as the process of sourcing which is enabled with the web-enabled technology to enhance the entire life-cycle of the procurement procedure for both suppliers and buyers. This usually takes a form of negotiations between a group of suppliers and a buyer, each competing against other to win the buyer by leveraging their B2B sourcing platform.
E-sourcing – How can it benefit suppliers?
Supplier companies often feel hesitant to take part in an e-Auction as they feel a supplier may have been chosen already and they are only being selected as a placeholder for the process. Here are few benefits of eSourcing that it can offer suppliers.
- Purchasing process becomes more transparent
When you participate in e-sourcing, this helps companies understand in a better way the prospective supplier’s nature by enhancing transparency and offering a clear framework for the way in which an organization will market and promote their goods and services.
- Get an insight into culture and structure of buyer’s organization
Suppliers can easily benefit by better analyzing a buying company’s vision, mission and values as they have been stated in the requirements of the e-Auction. To tell it in layman’s terms, it helps you determine whether or not you prefer to carry on business with the buying company ever again in the near future.
- Better diligence in validating services and products
The formal RFP and the process of reverse auction force buyers to spend more time in communicating and creating product specifications, delivery requirements, contract specifications. This prepares the suppliers in a better manner for the formal contracting and negotiation process.
- Diminished CAC or Customer Acquisition Costs
e-sourcing usually reduces the time it takes to reach in front of a customer. Instead of waiting for months and weeks for a single response from some marketing campaign, an e-sourcing event can work as a direct channel which boosts sales and capital efficiency of the marketing team. This also reduces the months that you may need to get a new customer.
- Enhanced competitive intelligence
Participating in e-sourcing also offers a means to check out your competition and create competitive intelligence, irrespective of whether you’ve won the business or not.
Therefore, you no longer have to limit yourself to cost savings as procurement can be leveraged at every level to obtain quantifiable improvements within the objectives and goals of a company. You can take a look at Scanmarket.com for more information.