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3 Reasons Why Your Outdated Sourcing Tools Are Holding You Back

March 5, 2021

This is the tale of two trends and how they are becoming inseparable: procurement and SaaS (Software as a Service). What is the relationship between a long-established business role and the hottest trend in cloud computing? For a start, both are increasingly seen as a key to a company’s success.


Procurement has a long history. It goes back centuries. A company’s procurement or sourcing team is responsible for obtaining the goods and services needed for business purposes. This can be anything from raw materials to construction equipment. If it’s something the company is paying for as part of its business, more likely than not, the procurement function is making the arrangements. Given the depth of its involvement, you can understand why an effective procurement or sourcing team is a critical component in the success of a company.


SaaS is a considerably more modern development. The advent of cloud computing has allowed for the development of SaaS. Instead of the traditional model of installing software on a PC, SaaS runs an application in the cloud. Virtually any device with an internet connection can access it. 

You can understand the advantages that SaaS offers. IT support costs plummet, software costs drop, payment is more flexible since companies pay for user access rather than buying the software outright. Deployment is vastly simpler. Team members can access the software remotely, and data is stored centrally in a managed data center. It’s not just employees who can access the software from anywhere. With SaaS, you can give clients and partners access, providing a level of collaboration that’s simply impossible with traditional software. 

In addition, because SaaS applications are running in the cloud, they have another significant advantage: artificial intelligence. As powerful as the latest desktop PCs might be, they are no match for a cluster of web servers that leverage parallel processing. Ultra-advanced capabilities like machine learning and AI are increasingly being tied into SaaS, making these web-based applications vastly more powerful than their traditional desktop counterparts.

Why Your Outdated Sourcing Tools Are Holding You Back

Now that we’ve explored the basics of procurement and SaaS, it’s time to tie them together. It should become crystal clear that a company that relies on traditional sourcing tools is missing out. Those that adopt SaaS for sourcing gain a significant competitive advantage. They won’t just live up to their role as being a key to corporate success; they are going to seriously outperform their rivals. Being late to this party is worse than missing out on metaphorical cake—it could mean massive missed opportunity, monetary and otherwise.

Here are three reasons why outdated sourcing tools—tried and true as they may be—are holding back sourcing professionals.

Sourcing Complexity Has Outstripped Manual Processes and Human Abilities 

A modern procurement office is an incredibly complex affair. Companies now operate within a global environment. Even if they aren’t selling internationally, supplies and services inevitably come from suppliers in other parts of the world. That means managing supplier relationships beyond borders. It means a global bidding process. It means tracking a complex range of variables, including currency exchange rates that change by the hour, international transportation logistics, fluctuations in worldwide demand, and even factors like weather or political upheaval. Communication with suppliers could happen by text, email, phone call, or a conversation with a local representative. 

Making the situation even more challenging, the company you work for must be agile and able to react quickly to changing market conditions. Yesterday’s killer product may be discontinued in favor of something new tomorrow. That puts incredible pressure on the sourcing team.

Traditional sourcing tools were not designed for this environment. Functions that are still using these tools are at a serious disadvantage. Employees are stressed, and the department struggles to keep up. Strategic sourcing is critical for success, but how can a sourcing team be strategic when they cannot effectively track and account for all the pieces in motion? 

Suites Try to Do Everything but Fail to Deliver 

Over the past several decades, software suites have been the dominant tool on office computers. The sales pitch has always had appeal: buy and install one piece of software that does everything for everyone.

That sounds good in practice, but in reality, software suites are holding back procurement teams. Yes, you can cobble together a basic sourcing capability using these tools—companies have been doing it for years. However, this results in a series of compromises. None of these tools were designed by procurement professionals. They are general-purpose tools that force the sourcing team to adapt their capabilities as best they can to a very specialized workflow.

Suites are a compromise, something that has become even more obvious as the complexity of sourcing has increased.

AI and Automation

Artificial intelligence and automation are the future of sourcing. Not in the sense of replacing sourcing professionals, but in the way that this advanced technology complements their role.

Repetitive tasks that are error-prone and boring? Machine learning in SaaS solutions means these tasks can be automated, eliminating mistakes and freeing up staff for more important work. AI, in combination with rich, centralized data (a key feature of SaaS), supports incredibly powerful analytics with advanced reporting capability. AI can even be part of the bidding process, with lightning-fast responses that account for the myriad of variables in play, for greatly improved success rates.

Traditional sourcing tools are shut out from the next-generation advantage of AI and automation.

Convinced? Here’s What to Do Next

The market for sourcing tools is vast and growing. Having the right tool with the best features is vital to the success of a procurement team, and that means adopting the best strategic sourcing software or solution. Arkestro increases sourcing velocity, increases competition and collaboration, and drives significant savings. Don’t come late to the party and miss out on the cake. Learn more here.

For more information on “Best of Breed” solutions watch “Best of Breed”: Digital Procurement Roundtable with Kearney’s Dr. Elouise Epstein with presentations from Arkestro, Scoutbee, and Vroozi.

Ready to make the leap to a “Best of Breed” Solution? Now is the time! Join us at Optimal for the “Best of Breed”: Startup Showcase featuring 15 of the leading procurement startups.