The benefits of eSourcing may be clear for buyers, but streamlining the procurement process tends to be met warily by vendors. The apprehension stems from the impression that any level of process automation commoditizes their products and services, and that eSourcing platforms are largely one-sided in favor of the purchaser.
The fact is, however, that eSourcing platforms can facilitate real-time dynamic feedback and foster strategic communication so that it becomes a valuable tool for both purchasers and suppliers.
Here are some of the top benefits of eSourcing:
1. Unparalleled transparency through technology
Most eSourcing platforms are capable of providing real-time feedback via analytics tools and itemized ranking. This means that not only do buyers enjoy a big picture view of where all their suppliers stand and what they have to offer, but suppliers also get unprecedented competitive intelligence. Insight into what competitors are e.g. bidding in reverse auctions puts a supplier’s own pricing strategy into a clearer perspective.
2. Levels the playing field for all suppliers
eSourcing platforms ensure that all suppliers have equal access to the same information from the buyer. This promotes fair play among all participants and guarantees that everyone is able to see the same questions and answers. On the flip side, removing bias from the procurement process ensures that purchasers get the best possible bids and options from suppliers.
3. Improves trust between suppliers and develops relationships
Here’s how the typical procurement process works when done manually. Purchasers will start by briefing multiple suppliers on the details of their inquiry. From there, a supplier will come back to the purchaser with an offer. In order to negotiate the bids from all suppliers, purchasers will typically present the pricing offered by supplier A to supplier B (or vice versa).
The whole process is quite tedious, and tends to foster an adversarial relationship between purchasers and suppliers. While purchasers may end up with their desired bids, suppliers may end up feeling shortchanged. This isn’t a great way to start a working relationship.
This is something that eSourcing handles easily. It’s the market that drives the price and because it’s out in the open, it can’t be pinned on a specific supplier or the purchaser’s negotiation skills.
4. Saves time for all parties involved
There’s a lot of back and forth when it comes to the procurement process. Briefings alone can take up hours — if not days — out of already busy schedules. And that’s excluding any negotiations.
Allowing both purchasers and suppliers to access standard templates and collaborate via a central system accessible to all relevant stakeholders can drastically streamline the process for everyone.
5. Offers more business opportunities
eSourcing platforms not only ensure that purchasers achieve operational efficiency, but also offer ease of use to suppliers as well. Once they familiarize themselves with how the platform works, it’s now easier for them to join bids for your company and win potential business.
One last note…
While software-enabled procurement is anchored in the same basic concepts of more manual processes, shifting to a digital platform will require some process changes for everyone involved. Both purchasers and suppliers will undoubtedly reap benefits from a high quality eSourcing platform, but it will require a commitment to changing old habits and processes for eSourcing to truly shine in your organization.
Educate yourself and your suppliers so that key stakeholders in your organization can develop a positive view of eSourcing, understand what it can do for you and start leveraging its benefits. If you have any experience with using eSourcing platforms, we’d love to hear all about it. Leave a comment below.
Talk to us to find out how Vendorful can help ensure you and your suppliers take advantage of the benefits of eSourcing. Get in touch with us today.