First stepping onto the scenes more than two decades ago, sourcing optimisation is defined as the combination of sophisticated mathematics and computer technology to analyse and seek out ‘optimal’ or the most cost-effective supplier or carrier.
So why are sourcing optimisation tools lacking mainstream adoption for those looking to digitally transform their procurement?
“After all, upon adopting sourcing optimisation, most teams report new savings after their first bidding event, improvements to their process best practices and even enhanced supplier relationships. Yet some sourcing professionals still believe sourcing optimisation is either too complicated or unnecessary for their requirements, often preferring to stick to basic e-sourcing software or desktop tools for their negotiations,” explained Keelvar.
Discover three ways in which a procurement digital transformation strategy can benefit from sourcing optimisation technology:
1. Sourcing optimisation has the biggest ROI
According to Keelvar, sourcing optimisation has the biggest ROI of any digital procurement technology, a valuable benefit for those with cost-saving measures high on the agenda.
“Not only does sourcing optimisation afford benefits that are simply not possible using legacy systems, it also has possibly the highest ROI of any SaaS solution that a procurement team can purchase,” said Keelvar.
“In almost every case, the first sourcing event that they conduct utilising a sourcing optimisation technology, it will more than pay for the entire subscription of the tool,” commented David Siedt, Senior Analyst and Pre-Sales Engineer at Keelvar.
2. Efficiency and automation
While Keelvar acknowledges the role that spreadsheets will continue to play in procurement, the organisation stresses that even the most expert users can benefit from the time-saving potential of sourcing optimisation technology.
“By turning to spreadsheets to manage events, in many cases you’re effectively limiting the number of suppliers that you can invite as it becomes unwieldy to collect and normalise such vast quantities of data manually,” commented Keelvar.
By adopting a sourcing optimisation technology, organisations can automate their work as well as centralise their data and increase traceability across their bidding activities.
“Additionally, the option of flexible bidding -- a key component of any sourcing optimisation tool worth its salt -- gives suppliers the ability to reveal innovation as well as savings opportunities that may otherwise be missed,” added Keelvar.
When it comes to the adoption of a solution, the scalability of its function is a key consideration. Keelvar reassures that: “Big or small, simple or complex, sourcing optimisation has the versatility to handle all-sized events -- and it’s not just limited to certain categories, either.”