What is eSourcing?
eSourcing, also known as electronic sourcing, refers to the process of selecting and negotiating with a new supplier. It forms a smaller segment of the entire procurement process, which focuses on choosing a supplier, and deciding whether they are fit for purpose through assessment.
Why is eSourcing Important?
When selecting a supplier, it’s essential that they meet the requirements of the contract. Key drivers could include compliance, price, product quality and location, amongst others. The eSourcing process allows suppliers to complete submissions, so businesses can conduct an assessment, and select the best supplier. eSourcing can be broken down into several smaller stages, as seen in the graphic below:
What is Strategic Sourcing?
Strategic sourcing refers to an overall strategy when selecting suppliers, which factors in long-term business targets. Working towards strategic sourcing targets requires a level of planning and analysis. This stage of the process might involve setting specific targets for each new sourcing project.
What are Supplier Tenders?
A supplier tender refers to the process of suppliers submitting formal bids for a contract. This could be regarding products, services or works. A bid allows suppliers to supply a variety of vital information on their goods and services. This information allows companies to assess whether a supplier is the best fit for the job and decide who to award the contract to.
To discover how to transform your tender process, see our article here.
What are the different types of tender?
This table below shows examples of different tender types:
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Request for Information (RFI) |
A document sent to a supplier to find out more about their goods and services. The contents of the document are at the discretion of the company sending out the request. |
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Request for Proposal (RFP) |
A request made by a company for suppliers to submit bids for a certain contract, so they can decide which supplier to move forward with. |
|
Request for Quotation (RFQ) |
A request by a company for potential vendors to send a quote to take on a contract. |
What are eAuctions?
eAuctions allow potential suppliers to participate in live bidding on a specific contract. They negotiate in real-time to determine the prices they would be willing to pay to complete a specific job.
What are examples of different eAuction formats?
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Reverse |
Suppliers compete for the contract through bids which decrease in value, instead of increasing in value. It’s the reverse of a traditional auction. |
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Dutch |
Dutch eAuctions are characterised by a first come, first served principle. From a set starting price the auction will increase in pre-defined price steps, until the first supplier accepts the current level. Dutch eAuctions are useful when the market price is uncertain |
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Price |
Suppliers can view the leading price in the eAuction. This type of auction can be useful if pricing transparency is required |
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Positional |
Suppliers can see where they are ranked in the eAuction, for example if they are 1st, 2nd or 3rd. Most procurement auctions benefit from the competition this type of auction normally delivers |
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Multi-item |
Multiple items can be auctioned while their values appear separately. Multi item eAuctions are typically used when several items are being auctioned, yet not every supplier can provide all the items. |
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Forward |
A forward eAuction is like a traditional selling auction, where bids go up instead of down. This can be useful when negotiating rebate values of goods or services, or in other special circumstances |
What are the benefits of eSourcing?
Sourcing is a difficult process to complete manually. Paper or spreadsheet-based systems offer little oversight of supplier submissions, which makes it a challenge to complete any effective analysis for strategic sourcing purposes. Not to mention that the inefficiency of spreadsheets is a substantial time-sink. Manual systems don’t allow for any advanced time-saving technologies, such as automation or AI, which can be used to keep projects on-track.
In short, eSourcing allows buyers to bypass the inefficiencies of paper-based sourcing. The digital oversight that eSourcing allows for means that buyers can have more control over their projects, with at-a-glance views of deadlines and task status, as well as automated reminders eliminating the need to chase potential vendors.
What is the advantage of using eSourcing Tools?
By using eSourcing tools, you can streamline many of the inefficiencies that arise from using manual systems through technologies such as automation, integrations and artificial intelligence. This allows you to drive progress in your eSourcing projects, and make they are completed on-time. Additionally, eSourcing tools allow for more data-driven decision making, with Analytics functions offering clear insights for the user. For example, if you have savings targets, it’s possible to track savings by sourcing project via dashboards and demonstrate progress.
How can ARCUS® Strategic Sourcing Suite help with eSourcing?
Our Strategic Sourcing Suite consists of four software modules which allow buyers to streamline eSourcing, whilst making progress towards their long-term strategic sourcing goals.
ARCUS® Strategic Sourcing Management (SSM): ARCUS® SSM allows procurement professionals to manage sourcing projects centrally, track project drivers and maintain oversight of task status.
ARCUS® eRFX: With ARCUS® eRFX, procurement professionals can run, manage and track large supplier tenders from a central system, increasing efficiency in tender management. To discover the advantages of using tendering software, see our article here.
ARCUS® eAUC: ARCUS® eAUC allows users to executive live eAuctions in real-time through a cloud-based system. With a variety of different eAuction set-ups and configurations, the system places you in the best possible position to achieve sourcing targets.
ARCUS® Analytics: ARCUS® Analytics is our data visualisation software, which allows users to leverage real-time data, customisable reports and interactive dashboards to gain sourcing insights and demonstrate progress towards strategic sourcing goals.
To discover more about our eSourcing offering, see the dedicated page here.
If you would like to know more about how we can help you with your eSourcing, book a call with a member of the team today.