Misconceptions About E-sourcing

E-Auctions are very essential tools in a procurer’s toolbox and is capable of providing extraordinary value if appropriately applied. However, wrong implementation and sourcing strategies and a lack of the necessary expertise needed for a successful execution, oftentimes undermines the potentials and benefits that can accrue from e-sourcing practices.  This sometimes results in having disappointed and disgruntled sourcing teams that become open to myths and misconceptions about the true worth of e sourcing technology.

So with all these tales of woes hovering everywhere in the air and contaminating the minds of optimistic e-sourcing professionals, how then are we to determine what information is true and that which is a myth as far as modern sourcing techniques are concerned.

Listed below are 5 of the most popular of these false facts that are being peddled about e-sourcing

  1. E-sourcing techniques are only useful when opting for the lowest price goods or services.

This is so false! because negotiations don’t begin until at the end of a bidding process. This starts only after expected service offerings, product specifications and terms of contract has been agreed by both parties. Suppliers who then surpass these criteria are invited to participate in the negotiation process where the pricing is finally being considered.  With e-Auction, products, prices, quality and terms of purchase are clearly visible for all to see and suppliers can get involved in open competition. This process captures in a central location all the information that is needed so every player has equal opportunities to consider these factors before making business decisions.

E-Procurement has a lot more to offer than just competitive pricing – With e-sourcing you are able to get the best value that your money can buy.

  1. E-Sourcing is only used when offering commodity items and products, not services.

eSourcing techniques can be applied in numerous categories across the business world, not just with commodities and products. Services such as, cleaning, laundry and waste removal can be sourced online with significant savings to be realised at the end of the day. Sourcing experts can also identifying new online sourcing categories that might be relevant and specific to your business needs and likewise provide guidance on how best to go about it in order to receive great value for you and your business.

  1. Esourcing does not produce as much significant savings as is often described.

Regarding this particular line of thought, I can only say to you; “Why not try it out and see for yourself”. Too many companies these days no longer worry themselves about controlling her indirect spend because it is natural to regard it to be much smaller in size when compared to direct spend. However, you cannot even begin to imagine the huge amount of savings that can be realized in this category of spend, which includes; office supplies, computer equipment, floor mats,  hangers, display racks for retailers e.t.c. and any other item or supplies that your employees would ordinarily be needing. Smart procurement teams have realized this and are literarily not sparing any expense when it comes to all things procurement on behalf of their organizations. It’s time to get more creative with your company’s sourcing needs both in the direct and indirect categories of spend.

  1. eSourcing technology is a “one-size-fits-all.”
    This is so not true. Every organization’s procurement team have their own goals and tasks set out for them, and this is why a one-size-fits-all ranking being applied to all categories of suppliers is a recipe for disaster. Applying generic ratings to all service providers is usually not a fair and realistic strategy to adopt and practice in the world of esourcing technology. Different providers have their different strengths and service offerings even if they are operating in similar line of business. It is therefore important for the procurer to explicitly define expectations in each procurement exercise that he and his organization embark on. .
  1. Collaboration is not necessary when it comes to improving esourcing initiatives

Under normal circumstances, I’m sure we will all agree that collaboration breeds more creativity and innovation. So why should it be any different with esourcing practices? Decision making normally is a collaborative activity and collaboration with your procurement team and other stakeholders can help you gain tremendous insights that can enable you solve problems much faster and better. Opportunities that lie within collaboration are huge from both the supplier’s and the procurer’s end. Apart from the significant cost savings that can be obtained from economies of scale achieved through collaboration, collaborators also stand a good chance improving their current decision making process and sourcing initiatives by sharing ideas and experiences and also exchanging notes on past practices that have worked out well for them and their respective procurement teams.

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