Sourcing Software — Everything a Procurement Professional Should Know
Sourcing software has sped up the procurement process of companies who use it. But, not all business adapts to the technological advancements that we have right now. Some still choose the manual process in procurement and that is fine.
For this article, we will discuss how effective it is to employ sourcing software in your procurement process. We will also explore different software you can use in your business.
After reading this article, you will know how sourcing software can help your procurement greatly. The knowledge you will gain will also allow you to decide which sourcing software is best for you.
What is Sourcing?
We must first define what is sourcing before we get into sourcing software. Sourcing is the process of acquiring goods by finding a reliable supplier or service provider. It is needed to ensure that the business can operate without any disturbance brought by insufficient materials.
An effective sourcing process researches the background of potential suppliers. It researches the quality, prices, and satisfaction of previous clients of the supplier to ensure that it matches its requirements.
The future of sourcing is e-sourcing. E-sourcing is short for electronic sourcing. It is pretty much the usage of the internet to source for suppliers to acquire your materials.
E-sourcing is done electronically through the use of sourcing software. The only difference between e-sourcing and the conventional sourcing process is the method and the length of time of the actual sourcing process.
The E-sourcing Process
The e-sourcing process involves requesting information, tender invitation, evaluation of tender, E-auction bidding, and awarding of the contract. This process is done step-by-step to ensure that the selected supplier can meet your demands.
First, the procurement department will ask for information on the products of the potential suppliers. After this, it will all be gathered to evaluate each tender. Once evaluated, the procurement department will select the suppliers for the bidding process.
The bidding process is where suppliers compete to win the bid of the company. Once a supplier wins, it will be awarded the contract. Read more about the process of e-sourcing here.
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Benefits of Sourcing Software
1. Puts you ahead of the competition
You may argue that you are already utilizing advanced tools by using electronic emails and excel spreadsheets. While these are all efficient electronic tools, it is far from electronic sourcing.
You can put yourself ahead of the competition by using sourcing software to develop your product with the combination of sourcing automation.
The usage of sourcing software allows you to gather information and protect the valuable data of the company. Additionally, sourcing software can incorporate processes that will improve productivity and streamline your supply chain.
2. Reduction of errors
Many companies still use manual sourcing. Although email and spreadsheets can help, it is burdensome for employees.
Using these tools may help but it is not fast enough to have real-time information available quickly and to track progress throughout the supply chain.
Sourcing software can streamline these processes to make product development, quality, and suppliers take part in and collaborate.
Sourcing software can reduce human errors as software is integrated with smart AI. This can remove unnecessary and redundant processes in sourcing.
3. More affordable
Before employing sourcing software, businesses take into consideration if it fits their budget. The supply for sourcing software has caught up with its demands. This means that it is much more affordable than ever.
Many start-ups have created and designed sourcing software that is sophisticated, efficient, and budget-friendly. This means that businesses can get their hands on sourcing software without thinking much about their budget.
Common Features of Sourcing Software
1. Centralized Portal
Collaboration is the important thing in any sourcing project. Since many will be affected by the supplier’s decision, it is important that all that took part in a project know their role.
Sourcing software is used to maintain a high level of collaboration throughout the sourcing process. People that took part in a sourcing project can view all documents and other processes in the centralized portal.
Many sourcing software has a built-in communication system together with the portal that makes collaboration easier. This allows the company to reduce errors that are caused by miscommunication.
2. eRFx management
eRFx stands for electronic request for “X”. This encompasses all the requests that you will send to your potential suppliers. eRFx management organizes and stores all the company’s requests.
The feature also helps to take care of the process from beginning to end and from writing to sending it to potential suppliers.
3. Document management
Once you send out all your requests, you must be ready for proposals, bids, and quotes that will flood your system. This feature organizes all the documents you received so you do not lose anything.
As soon as you receive the supplier’s proposal, the sourcing software will collect it and store it with the other documents. This feature reduces the risk of misplacing the documents you received from potential suppliers.
4. Comparison tools
You must now compare each supplier’s document once you receive it all. Sourcing software collects these documents that allow you to compare them side-by-side.
It will enable you to reduce the time of making a decision as you can easily see how documents differ from each other.
Sourcing software comes with integration capabilities. This means that you can combine two processes enabling you to streamline your sourcing process.
Best Sourcing Software
Coupa has all the features you need from e-procurement and e-sourcing systems. This helps you from your initial spend analysis to contract management. Coupa also has the ability to make transactions in numerous currencies and languages.
Procurify is built for small to medium businesses. It mainly focuses on how businesses can use the products easily and visibility to all employees. Additionally, it has cost management software and integrates well with the other systems.
Zycus’s custom-built RFX template saves a lot of time for buyers as it speeds up the process of creating and sending RFXs to suppliers. It reduces their costs by 15 to 45%. Zycus also allows the buyer to plan for the future by integrating what-if scenarios.
Ivalua consists of five modules that handle the different parts of the procurement process. The feature of Ivalua’s project management software is known as the best in the industry. It can also be configured to support recent workflows.
Frequently Asked Questions
1. What is sourcing software?
Sourcing software is focused on identifying and selecting suppliers through the use of the software.
2. Should I use sourcing software for my business?
Yes. sourcing software will greatly improve the speed of the production in your business.
3. What is the best sourcing software?
The best sourcing software depends on your business type, size, and budget.
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