The E-Sourcing Basics: What, Why and How (A Podcast)

Even though I've spent far too many words extolling the potential of more advanced e-sourcing scenarios and possibilities (e.g., sourcing optimization, complex multi-round bidding), the software-enabled sourcing basics still dominate the conversation and focus of most procurement organizations today. That is, for those who have moved beyond the real basics (i.e., Excel alone). Yet it's high time for us to explore the sourcing fundamentals in more detail. Earlier this summer, I had the chance to virtually sit down with Charles Dominick of Next Level Purchasing to answer a number of questions about the basics of e-sourcing. Charles recently posted a note calling attention to some of the highlights from the discussion. The full podcast is available on the Next Level Purchasing site: via this link. It's a packed 30 minutes of content for those wanting to come up to speed.

Charles has taken the time to excerpt one point of the discussion where I explain the difference between reverse auctions and other sourcing models. Consider, as one key point, how a "reverse auction is an online event in which there is true price-based competition [among suppliers] in real-time...so, when a supplier submits a bid, they know where they stand." We also cover a range of other topics including what types of sourcing tools are available, how to evaluate what technologies you might need/are likely to use, etc. It's basic stuff, but it's essential to get right.

Far too many companies rush into simply buying a toolset before understanding how they can leverage it as a component of a process rather than a replacement for a lack of a defined sourcing methodology in the first place. If you're curious to either come up to speed on the basics of e-sourcing -- or are simply looking for a good refresher or some talking points to share with your colleagues -- I suspect the time to listen to the podcast will be worth it for you. If you're curious about the subject, you can also download two recent Compass research papers investigating sourcing technology in more detail:

A Foundational Look at the Evolution of Sourcing Technology and Platforms

Advanced Sourcing Technologies and Platforms to Broaden a Portfolio

Jason Busch

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