Navigating The Risk Of Not Using E Sourcing Software
E Sourcing Definition
Most business recognize the need for effective and efficient procurement strategies, with sourcing software emerging as an essential tool to assist with procurement activities. Indeed, whether it is to streamline the sourcing process, reduce costs, drive improvement during supplier implementation and onboarding processes, or an overall simplification of the procurement process, for the C-Suite executive, proper implementation of suitable software for e-sourcing can deliver significant benefits.
However, there remains the risk of not utilizing software for e-sourcing purposes, which can lead to detrimental consequences. One primary concern relates to manual input of data and the risk of human error; when relying on manual processes, the chances of inaccurate entries occurring greatly increase. If deemed necessary, it may be necessary to employ additional manual input checks and balances, thus raising the cost of cost-saving measures.
Moreover, having to manually handle various procurement processes leaves less room to optimize these procedures. Such optimization is more readily achievable with the use of software and the automation of manual processes, both of which allow the freeing up of human capital for other activities. This can add to the core of competitive advantage — the influence of human resources. Proper implementation of suitable software for e-sourcing can open up time for resources to devote to ‘big picture’ initiatives, or to engage in supplier relationship management activities.
Lack of suitable software for e-sourcing can also lead to reduced capabilities for improved supplier identification. Without access to the latest technology that can filter or search for suppliers, business may struggle to identify suitable suppliers from among VAST range of possibilities. At times, firms may be unable to locate the most suitable supplier, in terms of cost and quality, thereby impacting their profit margin.
Moreover, organizations employing manual ordering processes run the risk of consuming more time than necessary. Orders placed manually, whether via email, telephone, or electronic document, require more time to enter and check manually. Again, employ of suitable software for e-sourcing can significantly reduce time needed for order placement and assistance with any compliance-related processes; this, in turn, can lead to faster delivery cycles and improved customersatisfaction.
Indeed, failing to consider the use of software for e-sourcing poses great risk. Furthermore, taking the step to include sourcing software into the procurement mix is fundamental to capitalizing on the benefits it brings. Before embarking on such project,organizations should conduct proper research and assessment, focusing on the technology that best meets the need of the organization, the cost savings the software will bring. While there is certain degree of risk, with the right software in place, the cost and time savings can prove transformative.
