The days of a buyer issuing and emailing enquiries to suppliers is drawing to a close as e-business transforms the market for goods and services. During this time, e-sourcing has emerged as one of the quickest and least painful ways for a company to boost its bottom line.
What is e-sourcing anyway? The Chartered Institute of Procurement and Supply defines it as ‘the sourcing process enabled with the appropriate web-enabled, collaborative technology to facilitate the full life-cycle of the procurement process for both buyers and suppliers’. E-sourcing often takes the form of real-time negotiations between a buyer and a group of pre-qualified suppliers, each competing to win the buyer, via a B2B sourcing platform.
What is e-sourcing anyway? The Chartered Institute of Procurement and Supply defines it as ‘the sourcing process enabled with the appropriate web-enabled, collaborative technology to facilitate the full life-cycle of the procurement process for both buyers and suppliers’. E-sourcing often takes the form of real-time negotiations between a buyer and a group of pre-qualified suppliers, each competing to win the buyer, via a B2B sourcing platform.
So why has e-sourcing become so popular? As in many other areas of online activity, the internet has brought suppliers and buyers closer together. This has reduced costs, improved communication and made processes more efficient. It allows the buyer to access a wider range of suppliers and by offering different bidding approaches, it gives very successful results.
Current e-sourcing systems streamline workflows, improve flexibility and speed up processes by reducing the time taken for a request for quotation (RFQ). This cuts the number of hours that buyers spend on tendering, giving them the time to work out strategies to tackle their business’s total value chain. The e-sourcing systems also increase efficiency and reduce costs for both buyers and suppliers, particularly for print and paper.
E-sourcing also brings huge improvements in transparency and openness between buyers and suppliers. The systems provide a portal through which suppliers can see all tender opportunities from a buyer, with deadlines, current statuses and final outcomes all clearly presented. Interaction through the system ensures speedy communication and effective feedback, so suppliers are always aware of the current status of the transaction. E-sourcing removes geographic boundaries so that RFQs are published more clearly and suppliers can engage more efficiently in other opportunities. This means that buyers can develop relationships with suppliers whose size or proximity might have previously been a barrier.
Finally, the systematic approach of e-sourcing processes gives companies control over their RFQ processes and records an audit trail for compliance purposes.
While its scope and success will vary by industry and by type of buyer, e-sourcing – whether through an e-catalogue, online auction, electronic RFQ process, or other method – is almost invariably a good idea that companies should implement sooner rather than later.
Current e-sourcing systems streamline workflows, improve flexibility and speed up processes by reducing the time taken for a request for quotation (RFQ). This cuts the number of hours that buyers spend on tendering, giving them the time to work out strategies to tackle their business’s total value chain. The e-sourcing systems also increase efficiency and reduce costs for both buyers and suppliers, particularly for print and paper.
E-sourcing also brings huge improvements in transparency and openness between buyers and suppliers. The systems provide a portal through which suppliers can see all tender opportunities from a buyer, with deadlines, current statuses and final outcomes all clearly presented. Interaction through the system ensures speedy communication and effective feedback, so suppliers are always aware of the current status of the transaction. E-sourcing removes geographic boundaries so that RFQs are published more clearly and suppliers can engage more efficiently in other opportunities. This means that buyers can develop relationships with suppliers whose size or proximity might have previously been a barrier.
Finally, the systematic approach of e-sourcing processes gives companies control over their RFQ processes and records an audit trail for compliance purposes.
While its scope and success will vary by industry and by type of buyer, e-sourcing – whether through an e-catalogue, online auction, electronic RFQ process, or other method – is almost invariably a good idea that companies should implement sooner rather than later.
