In today’s global, integrated supply chains, supplier relationships are more critical than ever to building competitive advantage. In fact, according to our 2016 eSourcing Report, vendor management and supplier relationships are among the top concerns for today’s CPOs, even ahead of cost control.

But when organizations continue to utilize the same supplier engagement strategies year after year, they miss out on long-lasting business relationships that yield the largest cost savings. According to our research, most companies (73%) maintain supplier data and administer sourcing events manually, pulling in data from various sources as opposed to utilizing a single, integrated eSourcing solution. As a result, many potential suppliers are left out of the equation if their information isn’t up to date. Administering a truly effective sourcing event becomes too time-consuming and expensive to manage successfully. This is especially true for organizations with widespread locations and departments, or large global networks of suppliers.

The scenario could be that it’s not easy to register new suppliers into the network, or it’s impossible to tell which suppliers are preferred. Or maybe business units make purchases without procurement involvement, or based on outdated pricing data. The result of these disparate, manual sourcing processes is poor cost control and visibility. Because these organizations don’t have the benefit of a single, transparent system, it’s not possible for team members to collaborate efficiently on sourcing documents in real-time. For example, one user may need complete the first stage of the template by defining the goods or services needed, while another may configure the scoring controls. The template will also need to routed to the legal department for a risk evaluation, ensuring that all details are compliant. But with today’s eSourcing solutions, it’s possible to set up a collaboration workflow and send the template to colleagues for authoring, editing, and approval. This functionality can dramatically cut the cost of sourcing events and supplier engagement.

The following tools are essential for effective supplier engagement projects:

• Event Creation
• Support for Open Events and Live Auctions
• Vendor Management
• Supplier Portal
• Post-Event Optimization Tools

When organizations implement a sourcing solution, they reap the benefits of a secure and efficient purchasing process, premium suppliers, and a healthier supply chain. For more information, read our 2016 eSourcing Report, which includes two real world case studies of sourcing process transformation.

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