Sourcing Software: Features, Integrations, Success Factors, Financial Outcomes
ScienceSoft applies 9-year experience in building supply chain management software and practical knowledge of 30+ industries to help companies implement effective sourcing solutions.
Sourcing Software: The Essence
Sourcing software streamlines all stages of the source-to-contract process, including supplier pre-qualification and onboarding, RFx and eAuction management, contract management, supplier performance analysis, and savings tracking.
The solution provides a centralized platform for supplier data management and analysis, running strategic sourcing events, and easy communication between the sourcing team and suppliers.
For a smooth end-to-end supply chain, eSourcing software should integrate with ERP, procurement software, a BI solution, etc.
The implementation of custom sourcing software may take around 10 months. Average costs for building sourcing software are $200,000 - $450,000, depending on the solution complexity.
The ROI of sourcing software can reach 900%+ for large enterprises.
Each real-life use case for sourcing software is unique, so solution functionality should be elaborated on and tailored to the client’s business specifics accordingly. Here, ScienceSoft have summarized the features commonly requested by our customers.
Supplier pre-qualification and onboarding
- Setup of supplier requirements (quality standards, sustainability, capacity, delivery terms, etc.) based on the internal sourcing policies.
- AI-enabled supplier pre-qualification against pre-set requirements based on data from public data sources (e.g., a credit rating platform).
- Configurable registration forms for supplier and sub-supplier onboarding.
- Automated supplier categorization by user-defined parameters (product or service category, region, strategic priority, etc.).
- Configurable supplier approval workflow.
Supplier data management
- Centralized storage of all supplier-related data (general information about supplier companies, supplier interaction history and ongoing activities, current capacity and pricing, etc.).
- Centralized supplier document storage (contracts, accreditations, certifications proving supplier compliance with business requirements, etc.).
- Search engine with filtering and metadata querying to navigate supplier-related data and documents.
- Template-based creation of Request for Information (RFI), Request for Proposal (RFP), Request for Quote (RFQ).
- RFx co-authoring.
- Configurable multi-department RFx approval workflow.
- Scheduled/ad-hoc RFx submission to selected suppliers.
- Real-time RFx status tracking (for sourcing specialists and suppliers).
- Automated RFx evaluation based on user-defined criteria (cost, quality, capacity and other parameters with pre-assigned weights) for supplier scoring and selection.
- Rule-based eAuction creation.
- Customizable auction page templates.
- Support for various eAuction types, including a reverse auction, a Japanese auction, a Dutch auction, and more.
- Template-based supplier invitations for participation in an eAuction.
- Running multiple eAuctions across various lots in parallel.
- An interactive display providing a single view into supplier bids in real time.
- Rule-based eAuction extension to allow for last-minute bid activity.
- AI-enabled cost-benefit analysis and bid compliance scoring for supplier bids comparison.
- Configurable supplier award rules to comply with various sourcing policies, e.g., multi-sourcing of mission-critical items.
- Template-based creation of supplier contracts.
- Collaborative contract review and editing (for internal stakeholders and a supplier).
- Configurable contract approval workflow (collecting approvals of internal stakeholders and a supplier).
- Contract status tracking (approved, signed, etc.) for internal stakeholders and a supplier.
- Alerts to a sourcing team on a supplier contract start, expiry, renewal dates.
- Automated contract version control.
Supplier performance monitoring
- Configurable dashboards with real-time supplier activity overview.
- Supplier performance monitoring against pre-defined KPIs, such as percentage of purchase orders delivered on time, average delay in purchase order execution, the number of back orders, and more.
- AI-powered analysis of reputational, financial, operational, and other supplier risks based on internal and public data sources.
- Supplier rating based on supplier performance and the level of engagement.
Spend planning and analysis
- Spend planning (by period, category, supplier, department, business entity, etc.) based on the analysis of historical spend data and data on internal and customer demand.
- Real-time spend calculation and tracking.
- Rule-based prioritization of product and service categories that require spend optimization.
- Setting user-defined savings targets (by sourcing event, product/service category, supplier, etc.).
- Automated savings calculation based on RFx and eAuction data.
- Savings tracking against pre-set savings targets.
- Customizable templates for savings reports.
- Savings forecasting (by period, category, SKU, location, etc.).
(for a sourcing team)
- Instant messaging to communicate with suppliers and sub-suppliers.
- Template-based and custom supplier surveys.
- Individual or bulk sending of supplier surveys (e.g., to get supplier feedback on collaboration).
- Supplier self-registration, managing and updating essential business information.
- Supplier profiles with all related activities: available RFxs and eAuctions, contract reviews, etc.
- Alerts to suppliers on received RFxs, invitations for eAuction participation, expiring data that need updating (accreditations, certifications), etc.
- Supplier forum with Q&A sections and a knowledge base (featuring R&D results, demand forecasts, etc.).
To drive supply chain resilience and streamline supplier-associated risk control, ScienceSoft recommends integrating sourcing software with the following systems:
Sourcing software + ERP:
To use up-to-date sourcing-related data at all levels of strategic and operational planning.
To initiate supplier selection for new product and service categories.
Sourcing software + procurement software:
To provide relevant data for supplier performance monitoring and analysis against the pre-defined KPIs.
To enable data-driven spend analysis for accurate setting of saving targets.
To ensure compliant supplier assignment to purchase requisitions.
Sourcing software + BI solution for analysis and visualization of sourcing data.
Sourcing software + a credit rating platform for accurate supplier pre-qualification and real-time supplier risk monitoring.
Easy-to-use RFx template editor
to enable non-technical users to create custom RFx templates, applying a specific RFx data structure, region-, category- or business entity-specific requirements, and branding elements.
Advanced analytics capabilities
to accurately assess supplier risks, get recommendations, for example, on optimal supplier evaluation criteria and their weights or optimal supplier award scenarios.
Intuitive UX and convenient UI of the portal
to increase its adoption among suppliers.
Powerful security capabilities
including role-based access control for internal sourcing process stakeholders and suppliers, multi-factor user authentication, intelligent sourcing fraud detection, and end-to-end audit trail for all sourcing-related activities.
Sourcing software implementation costs vary from $200,000 to $450,000, depending on the solution complexity.
Sourcing software drives significant procurement cost savings and can bring 900%+ ROI for large enterprises.
Benefits of sourcing software
Up to 90%
increase in sourcing team productivity due to eliminated manual sourcing-related tasks
average procurement cost savings for various categories due to obtaining the most competitive prices from suppliers
faster source-to-contract cycle due to template-based RFx and eAuction creation and automated supplier bid processing
faster contract preparation with customizable contract templates and automated contract approval workflows
supplier data management due to a centralized storage for all supplier-related data and documents
supply chain risks due to accurate supplier selection and real-time supplier risk monitoring
Top Off-the-Shelf Sourcing Software ScienceSoft Recommends
Best for: transparent supplier selection
Oracle Sourcing enables each sourcing team member to set individual supplier scoring criteria for RFx and eAuctions, automatically combines supplier scores from different sourcing team members, and provides graphical side-by-side supplier bids and overall value comparisons. The software enables complex multi-stage RFx processes with automated supplier exclusion from the shortlist after each stage based on knockout criteria defined by sourcing teams.
Available upon request to a vendor.
Best for: advanced eAuction data analysis
Jaggaer enables AI-powered supplier bid evaluation, intelligent recommendations on optimal supplier award criteria for eAuctions, and suggestions on alternative supplier selection scenarios and their cost impact. Software supports complex online auctions with multiple evaluators, configurable supplier evaluation criteria.
Available upon request to a vendor.
Coupa Strategic Sourcing
Best for: minimizing supplier risks
Coupa Strategic Sourcing is good for rule-based supplier qualification, real-time supplier risk monitoring, and AI-powered supplier performance analysis. Also, software provides access to the community of pre-sourced suppliers across 60+ product and service categories and allows for pooled procurement and community bargaining for businesses with common purchasing needs.
Available upon request to a vendor.
You need a sourcing solution providing specific features, for example, comprehensive AI-powered analytics on supplier risks, creating custom formulas for supplier performance assessment, intelligent savings forecasting, or support for non-standard types of eAuctions.
You operate in a highly regulated industry (e.g., government sector, healthcare, defense) and need a sourcing solution to meet specific compliance and security requirements.
You want to avoid costly and time-consuming integration of sourcing software with your legacy back-office solutions (ERP, procurement software, BI solution, etc.).
You need a blockchain-based sourcing solution for facilitated traceability of supplier contractual obligations, purchase order data, order shipment, relevant financial flows.
Sourcing software consulting
- Analysis of your enterprise-wide strategic sourcing needs.
- Suggesting optimal features, architecture, and tech stack for the sourcing solution.
- Preparing an integration plan with ERP, procurement software, BI solution, etc.
- Implementation cost & time estimates, expected ROI calculation.
Sourcing software implementation
- Strategic sourcing needs analysis.
- Sourcing solution conceptualization.
- Architecture design.
- Sourcing software development.
- Integrating the solution with other business-critical tools (ERP, procurement software, BI solution, etc.).
- Quality assurance.
- User training.
- Continuous support and evolution (if required).
ScienceSoft is an international IT consulting and software development company headquartered in McKinney, Texas. We provide consultancy and development services to help organizations build effective sourcing software tailored to their strategic sourcing needs. Being ISO 9001 and ISO 27001 certified, we apply a mature quality management system and guarantee that cooperation with us does not pose any risks to our customers’ data security. If you are interested in developing a robust eSourcing solution, turn to ScienceSoft’s team for custom sourcing software.