Where Lower-End Sourcing Tools Strike Out Quickly (Part 2)

- August 13, 2014 6:21 AM
Categories: Category Management, Sourcing, Spend Management | Tags: ,

Basic sourcing tools, especially those integrated with broader source-to-pay suites or the stand-alone capability of ERP providers (and those ERP providers have acquired), tend to come up short with specialist providers in a range of areas on a functional basis.

But from a pragmatic perspective focused on business requirements, there are a number of areas where lower-end tools tend to strike out fairly quickly. These include the ability to support centralized procurement efforts – including those organizations with centers of excellence (CoEs) – along with decentralized execution mapped to centralized requirements and processes.

Basic tools also can’t support these capabilities, which typically enable associated workflow, rules, and process management elements associated with supplier segmentations and groups and enabling those actually engaged in processes (such as analysts, category managers, overall program directors, and program specialists) – which then map to a specific set of capabilities tied to supporting additional needs in the sourcing lifecycle. These include process and templates for given commodity and supply markets, geographical elements/requirements, etc.

Furthermore, basic tools lack the capability of supporting complex category requirements in such areas as packaging, transportation/logistics, print, media, and services/contingent labor. They also are not a match for enabling federated sourcing and management approaches such as those required by organizations engaged in buy/sell or demand aggregation models (with rebates tied to certain performance, spending and other milestones). They lack the ability to gather, report on, and manage spend across a common group of companies, P&Ls, and so forth.

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