Boosting the savings with eSourcing

Strategic sourcing is the most value generated process in the procurement function. The professional procurement has been existing since late 80’s last century. The sourcing actives has been always transforming from sealed envelops to modern e sourcing tool. In the last decade, the eSourcing becomes the most wanted focus for the procurement leaders. The reason is simple as everyone wants to part of digitalization journey. As much as the leaders want to the e Sourcing, it is fact that the transformation is not a smooth with derisible results.

What is the eSourcing?

The eSourcing is leveraging the eProcurement tools to digitalize RFx and auction processes. The key benefits are

· Boosting the saving by conducting auctions

· Harmonizing the process to reduce the risk

· Capturing the market data and records

· Increasing on the efficiency on the process

What will make different on e Sourcing transformation?

Select the right tool

As the booming market of SaaS eProcurement, it is easily to find the giant or niche suppliers that provide eSourcing services. There is no such that the one is better than other one. The key is to find the one fits in your organizational digitalization roadmaps. Besides of the eSourcing capacities, you should consider the integration with your SRM tools and CRM tools which are the most attached to your eSourcing tool.

Spend more time on creating templates

The templates of eSourcing is the one of the most important factors dictating how successful of the output of e Sourcing. The template has to on purpose of different scenarios. It should be meaningful and user friendly to your sourcing manager and suppliers. The data will be collected has to the strategic in the logic structure. One of examples, the templates could have the key terms build in to collect the comments at sourcing stage. It provides the great advantage on the terms negotiation in the future process. You will never have problems to have more templates based on the nature of sourcing or categories.

Push more on auction

The auction is the best way to driving more competitive bids which give you more saving. The most comment I got is the auction is not applicable that my deal is service based with lots of complexity. The short answer is everything can run by auction. For any complex deal, the sourcing manger needs to run couple rounds of RFQ/RFP first. During the process, the sourcing manager will select the preferred candidates to be ready of running auction. The key is how the sourcing manager design the auction. The first step is to commoditize the deal to be price based which requires great knowledge of understanding the category requirement. Then, the auction strategy comes in the picture (e.g., the responding time, ranking system etc.)

Design your eSourcing roadmap with adequate change management

If the sourcing activities are dominated by email, calls or fax, you need plan to have more resource to start the journey. The common mistake is outsourcing the eSourcing to BPO vendors in the beginning. Most of sourcing managers are good at what they do on process but being afraid in the technology. It is common and acceptable as human nature when we are embracing changes in our lives. In this case, the team who initially take on the translates the current RFP/Q to the system. At stage, the team will work closely with the sourcing team on driving the eSourcing. The sourcing manager will learn and understand the capabilities of eSourcing which helps smooth knowledge transition. The next stage will be putting the sourcing managers in the driver seats after the knowledge gained. The last stage is the deals with low risk and less cost saving expected outsourced to the BPO vendors.