Harnessing E-Sourcing for Increased Cost Savings and Efficiency


Apr 22, 2022 | Procurement tools and solutions



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Stawan

Apr 22, 20222 min read


E-sourcing with procurement software provides organizations with benefits such as reduced time and cost, improved supplier management, better negotiation and decision-making, enhanced compliance and risk management, and increased collaboration and communication.


E-sourcing is the process of using
technology to manage the sourcing of goods and services, and procurement
software can provide a variety of benefits for organizations that use it for
e-sourcing. Here are some statistics and examples to illustrate these benefits:

  • Increased efficiency and cost savings: A
    study by the Aberdeen Group found that organizations that use e-sourcing
    software can reduce the time and cost associated with the sourcing process by
    up to 50%. One example of a company that has seen significant cost savings
    through the use of e-sourcing software is GE. The company has implemented
    an e-sourcing platform from Zycus and achieved a 35% reduction in the time
    spent on sourcing activities and a 10% reduction in the cost of goods. With
    FactWise’s end-to-end procurement platform, teams can achieve up to 25% in cost
    savings via analytics and 20% increase in efficiency via automation.
  • Improved supplier management: E-sourcing
    software can provide organizations with a centralized repository of supplier
    information, including data on supplier performance, compliance, and risk. This
    can enable organizations to effectively manage their supplier relationships and
    to quickly identify and address any issues that may arise. For example, IBM
    uses its procurement software IBM Emptoris to manage its supplier information
    and evaluate suppliers based on pre-defined criteria. FactWise offers holistic
    supplier analytics across price, on-time delivery, quality and others, so that
    teams can easily track supplier performance. Our impressive selection algorithm
    helps users ensure they work with the best-rated vendors across parameters that
    are most important to their specific requirements.
  • Better negotiation and decision-making: E-sourcing
    software can provide organizations with real-time data and analytics on
    supplier prices, lead times, and quality, which can enable organizations to
    negotiate better deals and make more informed purchasing decisions. A study by
    the Hackett Group found that organizations that use e-sourcing software can
    achieve an average cost savings of 8% on their purchases. FactWise offers
    dynamic RfX analytics alongside historical and vendor performance analytics to
    ensure that teams can leverage decision intelligence and always be data-driven.
  • Enhanced compliance and risk management:
    E-sourcing software can include built-in compliance and risk management
    features, such as contract management, supplier onboarding, and e-auctioning.
    These features can help organizations to comply with regulatory requirements
    and to mitigate risks associated with procurement activities. For example, the SAP
    Ariba
    e-sourcing platform includes built-in compliance and risk management
    features, which have helped its clients to ensure compliance with regulatory
    requirements and to mitigate risks related to procurement activities.
  • Increased collaboration and communication: E-sourcing
    software can provide a platform for collaboration and communication between
    various departments and stakeholders within an organization. This can help to
    improve cross-functional communication and to ensure that procurement
    activities are aligned with the overall goals of the organization. Users
    leverage FactWise’s smart dashboards and critical notifications to always stay
    updated and connected, with no dependence on emails, phone calls and so on.

In conclusion, e-sourcing software can
provide a variety of benefits for organizations, including increased efficiency
and cost savings, improved supplier management, better negotiation and
decision-making, enhanced compliance and risk management, and increased
collaboration and communication. These benefits can help organizations to
reduce costs, improve supplier relationships, and make data-driven decisions. Companies
such as GE Power, IBM, and SAP Ariba have already reported significant savings
and improvements through the use of e-sourcing software.



About the Author

Stawan is the founder and CEO of FactWise. Before founding FactWise, Stawan was the NA TMT-Procurement Leader at McKinsey. Passionate about procurement, Stawan has 15 years’ experience in enabling clients of all sizes to achieve business impact via procurement.


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