Sourcing, by definition, means to either obtain something or to find out where something can be obtained or gathered from.
eSourcing uses web-based technology to allow you to carry out your sourcing activities online, facilitating faster, better and more diverse tender opportunities. Commonly known as eTendering, eSourcing solutions offer a secure environment for procurement departments to both streamline and expand their process of buying. eSourcing solutions are used to identify the most suitable providers in the market, ultimately helping organisations to generate savings in time and costs.
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What Are the Challenges of eSourcing?
Highlighting why it exists
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eSourcing is an integral part of the wider eProcurement process. With the evolution of globalisation, managing tender opportunities requires specialised online tools to help streamline procurement processes. eSourcing is often seen as the foundation for the long-term success of a supply chain.
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eSourcing involves inviting new and existing suppliers to an online tendering event, collecting the relevant supplier information and making an informed decision about the tenders available. You can easily evaluate your results and begin the contract management process for your chosen providers.
How Does eSourcing Find Better Tender Opportunities?
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Request For Information - RFI
The online sourcing process begins with the distribution of detailed RFI’s. RFI’s are requests for information, or otherwise known as pre-purchase questionnaire’s (PQQ). RFI’s or PQQ’s are used to identify the suitability of suppliers before being invited to any tendering event. All data is stored on your eSourcing software data, making it easy for you to find supplier documents and get to know your bidders.
In Market Dojo offers an extra level to tendering in the form of a pre-qualification survey. Before suppliers can access your eSourcing event they must also complete the survey to your satisfaction, helping to weed out any unwanted bidders.
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Request For Quotation - RFQ
The RFQ (Request For Quotation) process can be extremely useful for establishing current market pricing before going to tender. eSourcing enables you to easily send out RFQs to your pool of suppliers that have already filled out RFIs. Once you have your quotes, these can be used to define starting points for your eSourcing events and are invaluable for businesses that have very specific budgets to adhere to.
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Instead of an RFQ, you may want a request for a proposal (RFP).
This is typically a request for a formal document containing details about the proposal in direct relation to the project. An RFP will inform you of how the supplier will deliver the requested services and how that impacts the bids they're going to make at your event. Most organisations prefer using RFPs over RFQs. In many cases, governments only use requests for proposals because it gives a better picture of how viable the bid actually is.
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eAuction
Once you have a pool of suppliers and their quotes, you might want to consider running a competitive eSourcing event, such as an eAuction.
eAuctions are a digital tendering process, where negotiations are made through a dynamic bidding process. More often than not, eAuctions are used to identify the best price for goods or services in the market. This can be done through a number of different ways, however universal to all different types of auctions is the ability for participants to compete against each other for an increasingly competitive value.
Reverse auctions allow suppliers to compete to supply goods or services to a buyer. Once you've outlined what you are looking to purchase, suppliers are invited to submit their lowest bid. Reverse auctions are a great way for buyers to identify the best price in the market and ultimately generate savings.
Price, however, doesn’t have to be the only focus of running a reverse auction. You have the freedom to award your contract to any one of the suppliers that have placed a bid. You may base your choice on other factors such as service levels, quality and so on. The eSourcing service helps you find a balance between low price and quality service.
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Open, Ranked & Japanese eAuctions
Market Dojo eSourcing allows for open, ranked and Japanese functionalities. By adding these elements to the auction process, you are afforded various opportunities to increase competitiveness.
•Open auctions allow suppliers to see the leading bid from their competitors. Every supplier knows where they stand, creating an open playing field and encouraging them to make competitive offers.
•Ranked auctions can be utilised when expecting several bids around the same price point. Ranked auctions assign suppliers ranks, based on how their bid compares to other live bids. As with open auctions, the ranking system can influence competitive bidding, with suppliers trying to move up the ranking table by providing better offers.
•Japanese Auctions operate by eliminating suppliers who are not able to meet your costing criteria, giving you extra control. Suppliers must meet a pre-decided value for the tender or they will be eliminated from the process. The value decreases over time, so the supplier must decide each round whether they would like to match the value or leave the process.
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While eAuctions and making savings are a key part of the eSourcing process, they are by no means the only benefits.
MARKET KNOWLEDGE - CURRENT SPEND ANALYSIS
Gather insights into current market pricing to analyse your spending against your competitors. Learn more about your market and gain an accurate insight into current procurement trends.
MINIMISE RISK AND CHAMPION COMPLIANCE (SUPPLIER ASSURANCE)
A detailed RFI and questionnaire process enables users of eSourcing platforms to maintain compliance at all times. Mitigate and minimise any foreseeable or unforeseeable risks.
SAVE TIME (AUTOMATION PROCESS)- BID ANALYSIS
eSourcing saves you time. Our automated negotiation process provides highly efficient procurement support. eSourcing eliminates time-wasting processes such as manual bid analysis and streamlines communication.
IDENTIFY NEW SUPPLIERS
Need to change your supplier? eSourcing presents a time-efficient way of narrowing down the market. Even if a supplier doesn’t win a tendering event, their data is stored in the eSourcing platform should they be needed later.
CREATE BETTER RELATIONSHIPS WITH SUPPLIERS
Efficient tender negotiation benefits everyone. Submitting bids and questionnaires is time-consuming, but our tool makes it much easier, increasing supplier engagement. Our centralised comms platform will also ensure there are no missed emails.
DATA VISIBILITY
Our platform ensures powerful visibility during the sourcing process. All data and communication is stored together for quick and simple access. And, when it comes to auditing, all information can conveniently be revisited.
How Market Dojo Can Help Procurement Professionals
How Cloud-based Solutions Have Transformed Procurement
Cloud-based procurement solutions were considered to be little more than a “bolt-on” application, before the postmodern ERP era. Now, however, they are often seen as the linchpin of a dynamic and global digital procurement practice.
Market Dojo is a UK based software company offering Software as a Service built by procurement professionals. Our solutions offer an array of capabilities, to help procurement professionals get the most out of their sourcing and supplier engagement activities. Whether you're looking to run 'on the spot' eAuctions, rearrange your Supplier Onboarding process, or simply a safe place to store your all important supplier contracts, we have the tools to help.
All of our products are fully on-demand to ensure the streamlining of the procurement process to add real value and mitigate risk. This is achieved through easy to use, yet capable eSourcing and supplier engagement applications which are available on-demand or with enterprise licencing.
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If you have any questions about our solutions or how to improve any of your current processes, our team are here to help. If there are specific functions you want to see or address, a demo can be tailored to your requests, highlighting any features that would directly benefit your organisation.
