eSourcing is only one part of the overall eProcurement process. eSourcing secures the best value and pricing which organisations can then lock into a contract. While eProcurement is the whole process from start to finish; sourcing to contract negotiation to ensure the smooth flow of goods and services. It allows you to manage your supplier relationships and track any savings. In addition, when done correctly, it provides invaluable data that can be used to optimise supplies and aid with strategic procurement strategies.
Even though eSourcing is a key part of the overall procurement process, it is still only one element of it.
The Definition of eSourcing
Before you purchase goods and services, you will first need to identify current spende, the business’s needs, as well as any current contracts you have with suppliers in. This is where sourcing comes in, as it paves the way for the successful procurement of the goods or services you need. By using e-sourcing software, this entire process can be done electronically. eSourcing softwares offer one central hub for consolidating quotes and proposals from different suppliers, allowing you to compare like for like with ease as well as a platform for vetting new suppliers and scoring them based on your organisations own criteria and values.
eSourcing often involves tools that help the buyer and supplier communicate with each other while facilitating the contracting process. It also allows your company to locate the goods or services you need to later purchase them with pre-negotiated terms and conditions through the software. Therefore, you can be confident that the whole of your organisation is purchasing goods and services for the same price, from the same supplier and therefore increasing compliance, reducing rogue spending whilst gathering invaluable spend data.
The Definition of eProcurement
After the initial sourcing process come the other procurement processes, which cover the transaction and compliance aspects of purchasing goods and services, followed by reporting and valuable spend data. Under eProcurement, your organisation can monitor contracts, savings, and compliance with your new suppliers. eProcurement makes this easier by performing this electronically and usually starts once the supplier signs the contract. The eProcurement process is a never-ending circle of interconnected processes that supports the successful growth of organisation
As a result, it acts on the negotiated contracts finalised in sourcing, which generally includes agreed pricing on the goods or services, agreed KPI’s and possibly a rebate incentive once reaching a specific quantity or spend vlaue. You can measure savings such as cost avoidance and cost reduction from this contract and your organisations overall compliance.
eSourcing and eProcurement is an easier way to conduct and control the overall procurement process within your organisation and offers a more transparent process to deliver products or services. Organisations do need to bear in mind that procurement does not stop once a supplier has been onboarded and a contract has been signed.
oboloo offers smart cloud-based procurement software with eSourcing, Contract, Supplier, and Savings Management. With oboloo’s different eProcurement modules, businesses can gain full visibility and control of their organisation’s sourcing and procurement activities. Try it out for free today!