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Sourcing Education

How to Select the Right Strategic Sourcing Software For Your Needs

November 21, 2020

You’re a procurement professional. The company or organization you work for has tasked you to choose a strategic sourcing software that supports this new way of doing things.

First of all, congratulations! The shift from reactionary sourcing to strategic sourcing is a huge one. There’s work involved—including picking out the right sourcing software for your sourcing strategies—but also many rewards.

Benefits of Smarter Procurement

Your company will move into a new era of supplier relationships that pays off in many ways, including easier identification and avoidance of supply chain risks, and reduced costs – procurement best practices.

Implementing Predictive Sourcing Software

To make the most of the strategic sourcing approach, you need to choose a strategic sourcing software that is right for your organization. You may have been making do with a truly epic collection of spreadsheets, but as impressive as all those cells and pivot tables might look, they don’t deliver the capabilities you need to succeed.

You, your team, the business units you interact with, and your suppliers are forced to jump through hoops to make it work. That’s been tolerable under the reactive sourcing strategy, but it will not work under the new way of doing things.

Not having the right software for the job is a serious obstacle to reaping strategic sourcing rewards.

Best of Breed or a Suite Solution?

You don’t want to make do with the cobbled-together solution, even if the office has been using it for years. But you also don’t want to jump on the first strategic sourcing software solution you see.

There are so many features and buzzwords to work though: AI, help desk, real-time, collaboration, integration, workflow, and deployment—to name just a few. Some vendors tend to latch onto impressive and futuristic-sounding terms like “AI” and use them in a way that’s stretching reality a little. How do you choose the software that will do the job?

List Your Sourcing Process and Needed Features

First, to choose a strategic sourcing software, you need to list out your must-have capabilities, and your current sourcing process. Then it’s time to identify the software that meets those needs. These become your requirements.

From there, you’ll have a shortlist of potential choices and providers, and that’s where it pays to review the additional features that make the different solutions unique.

Here’s a selection of key features that many modern procurement professionals are looking for when it comes to sourcing software:

      • Support for collaboration between stakeholders, including suppliers and business units
      • Transparency in the sourcing process
      • User-friendly interface that’s easy to use for any buyer or supplier
      • Reporting capabilities
      • Unified communication and real-time messaging between everyone using the software (goodbye long email chains!)
      • The ability to manage and track supplier relationships, including supplier engagement and performance metrics
      • The ability to collect, analyze, and use your data
      • Easy integration into existing workflow, including the ability to import data from external systems including ERP and P2P platforms
      • Support for a wide range of industries and sectors including chemical manufacturing, automotive, construction, pharmaceutical, manufacturing, and food & beverage.
      • World-class customer service and easy onboarding for you and your suppliers

This list is by no means exhaustive, and without a doubt, you’ll have specific must-haves to add to it. But it gives an idea of where to start looking.

Next Step – Choose your Strategic Sourcing Software

Once you’ve screened the initial field and narrowed your choices down, then it’s time to look at the specialized features and capabilities that make some options of strategic sourcing software stand out above the pack.

One of the most exciting developments in the industry has been the integration of artificial intelligence, or AI to help predict market changes. Some vendors throw around “AI” loosely, but sourcing software that truly leverages what AI is capable of will revolutionize your procurement function just as much as the shift to strategic sourcing. Predictive sourcing software can truly change things at your organization.

For example, think of the hours you spend on simple, repetitive tasks. It takes time, it’s boring, and you may not catch it until months later if you make a mistake. AI and the power of machine learning are exceptionally well-suited to take over these tasks.

Sourcing software with deeply integrated AI learns from you, allowing you to automate the tasks faster and error-free, and to see what’s coming before you’re left blindsided. This frees you up for more challenging work while reducing errors and cutting the time required. And AI doesn’t take coffee breaks…

Strategic sourcing software that’s designed with AI at its core and all of your data in one place becomes an extremely powerful tool for data-driven decision making. The analytics, reporting, and insight a system like this offers are unprecedented—and users don’t need to be data scientists to take advantage of the capabilities.

Better Quotes Faster

Perhaps the most significant leap forward that advanced AI brings to sourcing software is the promise of automated negotiations. Harnessing the power of AI to analyze your data and forecast the effect of variables like competition enables software at this level to generate intelligent first offers, and get your sourcing team better quotes faster.

Reducing the physical negotiation using Arkestro can give you 10-15 times faster quote velocity. Few sourcing software solutions are advanced enough to support this capability, but just imagine what a competitive advantage it would bring to your procurement department.

After reviewing must-haves, and the advanced features that would give your company an edge over the competition, chances are, the software option at the top of your list will be Arkestro. The combination of procurement experience and cutting edge AI integration makes for software that will alleviate stress and provide serenity to your sourcing team.

Predict. Procure. Win. Get a demo to find out how.