According to the article, one organization that underwent a sourcing journey observed, "transparency and meritocracy were brought into the system as soon as the company moved from ad hoc, negotiation-led buying to the reverse auction platform." Moreover, "when price competitiveness was brought into the buying process, cost savings followed."
What types of companies in markets like India are taking the e-sourcing adoption plunge? The article suggests that those companies in the process of globalizing their capabilities and assets, gaining exposure to platforms from the outside in are most likely to head down an automated sourcing and negotiation path. Curiously, much of the early adoption of e-sourcing technologies in India appears largely centered on reverse auction-driven strategies. Which is a shame for such a negotiation-centric business culture given the potential for supplier (and buyer) feedback and expressiveness through optimization-based sourcing approaches that allow for greater negotiation creativity and differentiation -- not to mention outcomes that can create favorable relationships for both parties, rather than simply eating into suppliers' margins.
- Jason Busch