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Strategic Sourcing Software
What Is Strategic Sourcing Software?
Strategic sourcing supports the information-gathering process that takes place before actual purchases are made. Whereas procurement software is more traditionally associated with the actual monetary transactions of purchasing, sourcing software is concerned with accumulating the data necessary to make smart and informed purchases. Sourcing provides buyers with access into a vast system of supplier databases, which makes it easier to pre-screen supplier data and analyze suppliers’ past successes and failures. Along with procurement and demand planning software, sourcing software helps organizations make intelligent decisions and is therefore a key element of supply chain management software.
Strategic Sourcing Software Features & Functionality
Strategic Sourcing Software takes managers through the following steps of the strategic sourcing process:
| Spend analysis | The first stage of strategic sourcing is for the software to initiate an initial spend analysis to identify areas in which spend could be decreased through new sourcing projects. |
| Supplier filtering | Based on revenue projections and market trends, the sourcing software begins to collect information and filter results, which saves time on information gathering and prevents buyers from wasting time and resources on suppliers that are obviously incompatible with their needs. |
| Electronic request for x (eRFX) | Using the software, sourcing managers can submit requests for proposals, tenders, quotes, and other forms of information in order to continue eliminating those suppliers that do not meet the organization’s needs or financial goals. Once the data starts coming in, the software manages that information and makes it easy to compare quotes and supplier capabilities. |
| Auction initiation | Once a list of viable suppliers has been created, a reverse auction can force suppliers to compete with each other on price. The sourcing software handles incoming bids and communicates standing bids to competitors. Or it can hand this task over to purchasing software, which will carry out the PO process to its conclusion. |
Evaluating Strategic Sourcing Software
Strategic sourcing software focuses in different areas: Some focus on spend analysis, while others focus on request management. Many will offer additional features and functionality that are typically associated with procurement or supply chain planning software. So when selecting your software vendor, assess the use case for your software and ensure that you look for something that meets those needs.
Specific questions to consider include:
- What supplier information does the software have?
- How (and how frequently) does the software update its supplier database?
- Does the software focus in one area, like spend analysis or contract development, or is it more of a comprehensive solution?
- Will the software be used by itself, or in conjunction with procurement software or a comprehensive supply chain management system? Is it compatible with legacy systems?
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Aravo Solutions
Aravo Solutions, an innovator in supplier information management, is specifically designed to help companies manage their strategic sourcing. Aravo supports Fortune 1000 customers in multiple industries around the world.
Coupa Cloud Spend Management
Supplier management and sourcing via Coupa Spend Management helps users manage the entire sourcing-to-pay process in a web-based system. Includes Google Maps integration and the ability to parse the Internet for prices.
Geneva Business Management Systems (GBMS)
Geneva Business Management Systems is a cloud-based ERP for supply chain professionals that need a dedicated system to mange sourcing. The ability to automatically generate reports is a big plus when identifying where to focus.
Epicor Supply Chain Management
Epicor, one of the premier ERP providers, has developed a solution that can successfully automate the research and acquisition of goods. The system includes advanced auctioning abilities to take into account fluid prices.
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Manhattan Associates
Over 20 years of experience as a supply chain software provider. Manhattan Associates’ system includes functionality for inventory, warehouse, and transportation management.
WISE
Royal 4 has provided software applications specifically for supply chain optimization for over 25 years. We believe Royal4’s best-of-breed sourcing application meets the needs of both small and enterprise operations.
JDA Software
Over 70 percent of the Supply Chain Top 25 use JDA Software. Analyzes performance at both the supplier and commodity level. Includes compliance checks, SPM analyses and other productivity measures to increase optimization.
S2K for Warehouse Management
We highly recommend S2K because of its integrated sourcing, procurement, spend analysis, and order management features within its warehouse application. The combination of these features allows for quick and educated decisions.
PackManager
Nuology includes sourcing functionality within a number of its standalone applications, including its demand planning, SRM, VMI, WMS, contract management and fulfillment applications. Ideal for contract manufacturers.
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Ten Steps Guide to Selecting the Right SCM Software
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