The eprocurement function’s relationships with its suppliers are typically the foundation of how the esourcing process and supplier management programs perform. Utilizing the seven keys in this report can serve as a catalyst to a series of processes that have a risk of becoming stagnant and repetitive over time.
No eprocurement department can claim to be a strategic function until it understands spend: what it’s buying from whom, and with what terms. Still, in 2014, many eprocurement organizations continue to operate without clear visibility into their spend.
The foundation of operational excellence within the eprocurement function is spend visibility… and an ability to take action on it. Unless the sourcing team can reveal spend visibility across its operations, it cannot improve results. To place more spend under management, most eprocurement teams must find and engage new stakeholder groups. To do so without a clear understanding of what each group is actually spending limits eprocurement’s credibility and the likelihood that any new group will want to collaborate.
Research shows that the timing of eprocurement’s involved in the esourcing process has a direct impact on sourcing results. Higher savings are reported in sourcing projects whereas procurement was involved at the front end of the process rather than later.
One of the many benefits from engaging early in esourcing projects is that it gives esourcing teams plenty of time and opportunity to figure out end-user specifications. A better understanding of the business need and use of a specific good or service allows for esourcing professionals or teams to exert greater influence on the bid package which can result in better quality and service levels and improved pricing.