Procurement tools are complex and challenging applications, and it’s difficult to train employees to perform even simple tasks such as participating in an e-auction, submitting their RFx responses, and raising a purchase requisition.Įmployees may find it difficult to memorize certain clicks and flows to complete required tasks. Given the inherent benefits of a procurement solution, it has associated product adoption challenges and change management risks. It becomes a single source of truth to minimize human errors and streamline the overall procurement process. This way, strategic sourcing can be viewed as an extension of the procurement process.Ī comprehensive procurement software delivers unparalleled value to enterprises by working on the pain points of both sourcing and procurement teams. One example of strategic sourcing would be negotiating a longer contract with a software vendor with a lower monthly rate. Sourcing uses insights from procurement for managing supplier relationships, while procurement builds on that foundation to obtain requisitions. Procurement, on the other hand, leverages the existing supply chains to ensure a steady flow of supplies. It involves proactive and continuous evaluation of the sourcing activities within the organization aimed at optimizing its supply base. Strategic sourcing is the process of developing the supply chain infrastructure ensuring the lowest-end costs for the business. Instead of opposing these two, it’s best to consider strategic sourcing as a part of a larger concept, which is procurement. Indeed, these are very similar and interrelated concepts. If you dig deeper into the topic of procurement management, you’ll notice it often goes hand in hand with strategic sourcing.
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