eSourcing can boost relationships with suppliers

3 Ways eSourcing Can Boost Supplier Relationships

When it comes to procurement, technology can make a significant impact.

Take eSourcing platforms for example. Whether it improves efficiency or reduces costs, there’s no denying that automating processes can provide significant operational value. With minimal effort, you’re able to communicate your objectives clearly, minimize tedious back and forth coordination between individual suppliers, and substantially reduce human errors in the sourcing process.

However, beyond improving internal efficiencies, companies using eSourcing platforms should also know it’s a tool that can facilitate better working relationships between businesses and suppliers. This post explains some of the ways it can do so…

1. Helps you find the right supplier efficiently

Traditional methods of sourcing suppliers can be a long-drawn-out process. It’s tedious, time-consuming and, given the effort, it takes to individually coordinate and brief potential suppliers, leaves a lot of room for error.

An eSourcing tool that streamlines the selection process makes things a lot easier. The tool allows you to simplify the entire bidding process given that everything is available on a central platform. As a buyer, you’re able to request all the necessary information you need from all potential suppliers at the same time. You can easily compare results and determine which supplier not only has the best bid but also best fits into your organization.

By identifying potential partners through eSourcing tools, you’re essentially starting a working relationship that wasn’t solely achieved through negotiation. It allows for time to create effective RFPs given that you’re removing the labor-intensive paperwork behind the process.

2. Improve communication between suppliers

Most of the errors made during the procurement process happen because of all the back and forth required to communicate with suppliers individually.

Typically, as you begin to search for suppliers, you will need to send out a brief to each of them. This means you will need to reply individually to their questions. A lot can get misinterpreted in the back-and-forth.

Using an eSourcing tool means all questions and clarification can be communicated via this centralized platform. Interaction on the platform is smoother and facilitates better collaboration. There’s also no need to keep repeating your answers given that everyone involved in the bidding process can easily refer to the information provided. In addition, coordination can be done in real-time.

Communicating in a structured way shows that you are considering your supplier’s time as well as yours. After all, as tedious as the procurement process can be for you, keep in mind that it can also be as time-consuming and complex for potential suppliers.

3. Provides unprecedented transparency

Any successful working relationship is based on trust. This can be difficult when you might be perceived to be starting a professional relationship on the wrong foot.  eSourcing tools make the process more transparent. Everyone gets the same access to the same information, and no one is given an unfair advantage.

This also translates to the selection process. Making your selection criteria available for everyone to access assures suppliers that they are all being evaluated on the same standards.

eSourcing offers a systematic and efficient approach to one of the most labor-intensive and complex processes in procurement–finding the right suppliers. Not only is this beneficial for operations, but it can also enhance supplier relations, which is critical to a project’s success.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your procurement process, contact us today.

eSourcing benefits buyers and suppliers

5 Benefits of eSourcing for Both Purchasers and Suppliers

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 advantages 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 strategic sourcing 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.