How to Be the “Best in Your Business” Through Spend Analysis and Strategic Sourcing (Part 2)
From computers and software to basic office supplies or widgets, organizations have a wide array of goods and services they need to purchase to support their business. While procurement professionals make it easier for users to purchase these items, sourcing’s job is more than just getting the best price and then buying “stuff.” It’s an entire process: one that can save you money, improve company efficiency and support you and your team in becoming the “Best in Your Business”.
As we discussed in part 1 of this blog series, spend analysis will get you started on the path to becoming the “Best in Your Business.” Spend analysis and eSourcing go hand in hand, with some even saying spend analysis is the heartbeat of sourcing. By identifying where you and your company is spending money, you can develop a sourcing strategy, set budgets that are more accurate and have data to support the overall corporate spend.
Pairing spend analysis with eSourcing allows you to:
- Better identify what you should be sourcing
- Leverage spend and negotiate the best prices
- Work with suppliers to not only determine the best scenarios, but best terms and conditions for your company
- Track contracts to ensure terms and conditions are met
- Determine if the suppliers you contracted with in the past are still up to the task
- Help identify the best partners for your business
- Manage risk by tracking market volatility, supply chains and even where items are sourced
- Manage auctions and RFPs
As Ardent Partners’ The State of Strategic Sourcing Report states: “eSourcing applications automate the supplier negotiation process and are among the most powerful supply management solutions available today. Price discovery, process efficiencies, bid evaluation analysis and optimization, and improved stakeholder visibility are among the benefits that eSourcing users typically report.”
While there are numerous benefits to eSourcing as mentioned above, companies report that only 29% currently use an eSourcing and/or Reverse Auctions, with 48% planning to use one. Companies are just leaving money on the table. In fact, automating and linking the two processes makes for a more seamless integration and can generate savings rates that range from 24% to 38% higher on an average sourcing project according to the Ardent Partners report.
SciQuest makes it easy for you to implement an eSourcing solution into your business with products such as Sourcing Director and Advanced Sourcing Optimizer. Not only do these solutions increase hard cost savings, but there are additional soft savings that can come out of the process. Cost avoidance, process improvements and the value add of improving customer satisfaction are just a few additional examples of how you can work towards being the “Best in Your Business.”
For more ways to optimize your sourcing processes, download the Ardent Partners State of Strategic Sourcing 2015 Report and watch the Herding Cats is not a Strategy: Move Beyond Tactics to Align for Success webinar, which discusses best practices and coming trends for putting practical strategies in place.