Sourcing Software Tools
The best strategic sourcing software is the one that meets the needs of your business. Not the first search result on google, the highest-ranked on G2, or the one your friend recommended.
Finding the right strategic sourcing solution can be daunting, especially when multiple stakeholders are involved, but can help procurement teams automate their processes, ensure procurement guardrails are considered before teams look at solutions, and enhance transparency within the organization. Here’s how to find the best strategic sourcing solution to optimize your procurement activities.
What is Strategic Sourcing
Strategic sourcing is part of the procurement process that is responsible for identifying and contacting suitable suppliers for the purchase of goods and services. The right strategic sourcing solutions will empower procurement and sourcing professionals to overcome business challenges and reach their goals of cost savings, spend control, and risk management. By automating and integrating sourcing activities, you can reduce time spent vetting new suppliers and focus your efforts on collecting and analyzing critical financial data.
Typically, in most organizations strategic sourcing consists of:
- Providing an overview and in-depth analysis of organizational spend to understand financial capacity, and to best monitor where and how money is being spent.
- Identifying the most suitable suppliers based on specific business criteria.
- Does supplier negotiations (including price, service levels, delivery schedules, etc.) maximize the value and minimize the total cost of procurement.
- Handles the negotiation and contracting process with suppliers, and manages the lifecycle of the contracts.
- Implements sourcing initiatives with continuous feedback for procurement improvement and optimization.
However, strategic sourcing will only help your procurement process if the right software is implemented that best suits your specific needs. The right strategic sourcing software can help with the following benefits:
- Increase savings and cost control by simplifying processes.
- Streamline the entire bidding, negotiation, and award process to drive efficiencies.
- Increase spend under management and monitor contract compliance.
- Create stronger supplier relationships and reduce supply chain risk.
- Ensure procurement guardrails are considered.
- Increase transparency between procurement and the organization.
How to Choose the Right Strategic Sourcing Software Vendor
Finding the best strategic sourcing software is not a one-and-done job. It requires ample pre-planning, an in-depth understanding of your business needs, and continuous collaboration with key stakeholders. Let’s take a look at the steps required below:
1. Determine a business case for the strategic sourcing software
Spend time analyzing your current business processes, pain points, and strengths to determine your strategic sourcing needs – with a future-orientated picture in mind.
Understand as a team:
- What are the reasons a strategic sourcing software is needed?
- What are the problems that the software will address?
This work will help you determine a business case for your desired strategic sourcing and share these requirements with stakeholders to ensure you are on the same page and solving the right problems with your choice of software.
2. Identify and collaborate with key stakeholders to gather requirements
Identify the key stakeholders whose buy-in will be required to implement the software successfully. Stakeholders inform the procurement team of what type of software should perform. They may be external or internal. Stakeholders help discover what the business needs are when evaluating solutions. Finding software that works for the organization requires collaboration with these key players to ensure high user adoption. Skipping this step may cause you to miss a key requirement or functionality.
3. Collaborate with key stakeholders to define and rank your strategic sourcing requirements and evaluation criteria
Understanding your business needs is a crucial step in selecting the right strategic sourcing that will benefit your procurement team and key stakeholders. Ensure that identifying your business needs is a collaborative process between critical decision-makers. Thinking about your current business processes will help you work out exactly what the organization needs from a new sourcing system, how it will fit into the company, and what technical and functional requirements are needed to execute your business operations effectively.
5. Compare Strategic Sourcing Software vendors to your requirements
Compare strategic sourcing software vendors to identify the best vendor to meet your requirements. Through research, identify a list of software vendors that can provide the services and software required. Vendors pay to play on Capterra and G2 crowd, so reviews may be biased. After you have done your research, send vendors your requirements and make sure they understand their requirements. In Olive, you can compare vendor responses to the needs of the business.
Innovation for Procurement
For procurement teams seeking better vendor relationships and reduced costs, automated strategic sourcing solutions are an obvious choice. The one chosen could make or break the procurement team. As businesses embrace digital transformation, there are many tools available that promise to make procurement easier – making it a challenge to find the best solution.
If you’re struggling to narrow down the best solution to your procurement needs, look no further than Olive. Procurement teams can use Olive first to find their own solutions that drive transformation and extend the benefits to other teams sourcing solutions.
Data gathered collaboratively in Olive helps procurement negotiate better contracts and get buy-in from the entire organization. Procurement can also be added to projects to define their procurement goals and guardrails ahead of time, helping procurement teams to collaborate with the entire organization and ensure the company sources solutions that work for all parties.
With the help of Olive, Procurement teams can achieve the following goals:
Drive Cost Savings and Time Savings
Olive’s streamlined platform means no more wasted time digging through your inbox to find vendor promises. Moving the procurement process from email, Word, and Excel into a single location creates reliability throughout the entire process. Automating your sourcing processes reduces manual work, lowers processing costs, and streamlines internal approval processes.
Based on data gathered in the app, Olive matches best-fit vendors to your established requirements, helping you determine a shortlist by only looking at vendors that meet the needs of the business. Invite those specific vendors to demo. Relevant stakeholders can discuss and score the vendor responses and even flag items for demo before inviting them to a meeting.
Robust Data for better negotiations
Olive automates the due diligence by time-stamping everything the vendor and buyer have agreed on, giving Procurement robust data to negotiate better contracts.
Increase Supplier Collaboration
With a streamlined sourcing process, the organization will lower supply chain risk and cut transaction costs by nurturing more strategic supplier partnerships. Olive’s surveys make it easy to collaborate with stakeholders across the business to ensure all requirements are collected and rated based on company-wide needs.
Want to learn more about how Olive can help find the best strategic sourcing solutions to fit your organization’s needs? Talk to us!!
Innovation for Procurement: How to Streamline the Strategic Sourcing Process