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Five proven ways to transform sourcing
Finding rock-solid statistics to justify business transformational projects can be tricky in many cases. But when it comes to improving the way you source goods and services, the evidence is plentiful and the numbers really stack up.
The financial case for transforming sourcing away from traditional manual processes is the strongest reason to take action.
Significant bottom-line savings
Companies using electronic sourcing methods have achieved significant annual savings. Meanwhile, it's been shown in our recent research, that 55% of incumbent suppliers will lower price in competitive events resulting in average savings of 8% per line item.
With a new sourcing framework in place, achieving 'best value' from every purchase becomes an everyday reality rather than a fuzzy aspiration. You can deliver ‘best value’ by improving the effectiveness and transparency of both strategic and tactical sourcing processes, while dramatically reducing administrative time and effort.
But what does state-of-the-art sourcing look like?
Here are five proven ways can you transform sourcing today if you have the right tools and expertise available.
Improvement #1: Sourcing events
It's possible to define and manage each sourcing event as a project with a sequence of one-time and iterative events, complete with dependencies and well-defined responsibilities. But the admin side is refreshingly simple, thanks to easy-to-customise templates, a milestone manager, system alerts and even visual charts that help everyone see the status of every project.
Improvement #2: RFx document manager
Need to capture what your colleagues need from suppliers? The process can be made infinitely simpler, thanks to a questionnaire tool that helps your team to speed up the definition process. Each question has formatted answers, a scoring mechanism, panel marking and auto-evaluation. Multiple people or departments can be involved if you wish. Responses can also be managed electronically and supplier communication handled automatically.
Improvement #3: Auction manager
In many instances, an openly competitive opportunity is the best way to source goods or services. With the right tools, the process doesn't need to be stressful and panicky. An auction manager solution can manage online bidding with ease — based on price increments, while factoring in any number of other parameters, such as quality, delivery, service and proximity. You can watch in real time as the hammer comes down.
Improvement #4: Quick quote manager
Sometimes you need a fast and simple way to obtain multiple competitive bids for one-time purchases of well-defined goods and services. A quick quote manager enables buyers to specify an item using free-form text and send an immediate 'invitation to quote' email to any combination of suppliers. The system records all interactions, making it easy to clarify requirements and select the right supplier.
Improvement #5: Extra resources
According to research, 65% of companies rely on sourcing teams of just 1-2 people, making it difficult to maximise savings. However, finding a partner who can provide managed sourcing services can make the difference when it comes to reducing procurement costs, maximising value and maintaining solid supplier relationships. Outside expertise can also mean you apply the right tools instinctively, make the most of leading best practice and get your business transformation up and running faster.
You'll never look back
It's difficult to put into words exactly how much better sourcing performs after it's been transformed. A once slow and tangled process suddenly becomes quick, streamlined, highly-automated and often effortless for everyone involved.
Ultimately, the perfect sourcing tool can be applied to each need. The correct requirements are defined and the right suppliers respond with their best value responses.
You'll see the benefits in terms of lower prices, increased efficiency savings, greater transparency, stronger compliance, lower supplier risks and improved satisfaction all-round. Suppliers will love the change too — because it's so much easier to do business with you. And that alone, often makes it worth them dropping their price significantly.
Find out how
can transform your enterprise.
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