eSourcing and eProcurement are a perfect pair – they go together like peanut butter and jelly. When used together, these solutions can transform any organization and empower purchasing pros to make data-driven business decisions.
So where does the rubber meet the road? And what does it take to get the implementation right?
“Oh yes, there is definitely a difference,” Olivier said. “Both are important. Basically it’s a concept referred to as upstream vs. downstream procurement. Where eSourcing ends is where eProcurement begins and closes the loop.”
In terms of functional capabilities, strategic sourcing is where the negotiations are held, contracts are stored, and suppliers are managed – that’s the upstream strategic sourcing process. And downstream procurement falls into a transactional PO based system, document management, and invoice and payments come into play.”
So, do organizations need both?
“No doubt about it,” Olivier responded. “It’s the same concept as if you’re going to plant a yard; you can’t just throw down seed without fertilizer and water. You need both – from a best-in-class stand point, everyone is looking to achieve cost savings and increase spend under management.”
These solutions from a core technology implementation and transformation standpoint help companies become best-in-class. (The solutions) help automate processes that build efficiencies, which from an analyst standpoint using an eSourcing solution increases the sourcing cycle three times faster.
Once you get agreements with new suppliers, if you don’t have the tools in place from a contract perspective, you will experience leakage and have a harder time when you go into negotiating better pricing with suppliers – you won’t have the data you need across the organization, so you lose the benefit that you worked hard to achieve in the strategic sourcing process.”