eSourcing

What is eSourcing?

eSourcing systems support procurement activity by helping you to gather information about suppliers, to source the most appropriate supplier, goods, or service. These systems can support the interfacing with suppliers to exchange knowledge, specs, requests for tenders, e/auction and evaluation and helps to improve the visibility of sourcing activities.

eSourcing software helps to lift the burden of manual paperwork, which is time consuming and susceptible to human error. eSourcing offers a way to automate processes, without compromising on the ability to select the right supplier for your organisation's needs.

How does eSourcing work?

eSourcing varies across organisations but it’s important to involve all relevant stakeholders at the early stages of implementing eSourcing software. eSourcing provides support for six processes:

1. Pre-purchase questionnaire: eSourcing helps the procurement team to fill out a pre-purchase questionnaire, which was usually done manually. Suppliers can now upload their answers into the eSourcing software, and which is then distributed around the business. This helps to save time and ensures accurate information is collected.
2. Invitation to tender: An invitation to tender document specifies all the requirements needed by the organisation. It’s also there for the supplier to submit information about its own procedures and processes. eSourcing helps suppliers fill this document out, rather than it being done manually.
3. Request for quotation: eSourcing sends out supplier’s forms, asking for all their prices and services.
4. Evaluation: Typically, the evaluation stage involves sorting out huge amounts of paperwork. However, eSourcing provides automated scoring, analytics and dashboards that will help save time
5. eAuction: This is where suppliers can bid on the contract, which encourages competitiveness, meaning you can get the best possible deal.
6. Contract award: once all details have been received, a contract can be awarded automatically through the eSourcing software.

What are the benefits of eSourcing?

• eSourcing can help to simplify analysis and model complex decisions in real-time
• eSourcing facilitates collaboration with suppliers through central systems that support communication and exchange of information, documents etc.
• Reduces costs as you’ll be able to easily access a broad range of suppliers
• Reduces the amount of time it takes to award a contract
• Suppliers can view all tender opportunities through supplier portals which increases competitiveness
• eSourcing enables integrated process automation: all requirements are distributed by the system and processed electronically. As a result, the amount of paper used is minimum which can contribute to an organisations sustainability goal.

What are the disadvantages of eSourcing?

• Some suppliers may struggle to understand eSourcing software and struggle to adapt to the new systems.
• As with all internet enabled applications, eSourcing brings the risk of data protection. As confidential information is stored online such as bank details and payment details, it’s important that staff have the right GDPR training in place before using the system
• There can be some resistance within organisations to the implementation of eSourcing