Sourcing (for direct) Solutions

What are Sourcing (for direct) solutions? 

Direct material sourcing solutions are a subset of the broader sourcing category. They share similarities with generic sourcing solutions, specifically the ability to create sourcing events and configure them based on various organizational, category and process requirements. 

However, sourcing solutions for direct materials support use cases and embed functionalities that are specific to them. These include:

• Bill of materials (BoM) management to provide robust capabilities for BoMs to provide product-centric views and a strong integration from/to RFxs.

• Cost analysis and cost driver identification to facilitate in-depth cost analysis and identification of key cost drivers to identify optimization opportunities related to supplier location, manufacturing processes, raw materials and sub-components, design, etc.
• New product development/new product introduction (NPD/NPI) integration to support NPD/NPI by facilitating collaboration between cross-functional teams involved in product development, procurement and supply chain management. These teams can also include external members (suppliers, partners, etc.).
• Predictive cost analytics and forecasting to leverage predictive analytics and forecasting capabilities to provide insights into future cost trends and market dynamics to anticipate changes in direct materials prices and make proactive decisions to optimize strategies.

How Sourcing (for direct) solutions factor into the S2P process

Sourcing is a crucial step within the broader source-to-pay (S2P) process. It is the foundation upon which the entire procurement process is built. Here’s how it fits in:

• Managing the need (and expectations): S2P starts with a business requirement for a good or a service. But, sourcing can also be triggered from a value optimization opportunity like cost savings and risk reduction or milestones (contract renewals for example).
• Sourcing takes over: Procurement professionals identify potential suppliers through various methods and solicit bids from them.
• Evaluation and selection: The sourcing team then evaluates the potential suppliers based on multiple factors like price, quality, reliability, risk and past performance. Multiple tendering rounds may happen to align offerings with the needs and/or drive value up.
• Moving through S2P: Once a supplier is awarded, the S2P process can move to contract negotiation, purchase order release, receiving goods/services, invoice processing and, finally, payment.

Why Sourcing (for direct) solutions are important

For companies seeking a competitive edge, optimizing the procurement of direct materials is critical. Direct materials — the raw materials or components that directly become part of a finished product — often represent a significant portion of a company’s overall spend. Sourcing solutions specifically designed for direct materials offer unique advantages that traditional procurement methods may struggle to achieve.

Sourcing solutions play a crucial role in the procurement process by helping organizations effectively manage their sourcing activities, the process of finding, evaluating and selecting suppliers. Additionally, sourcing solutions provide valuable insights and data analytics that help organizations make sourcing decisions based on bigger picture factors, such as market trends, supplier performance and risk.

Sourcing solutions for direct materials go further by impacting the launch of new products in terms of a faster go-to-market, innovation and so on. They also support the constant optimization of the supply base for existing products.  They do so by providing support for BoM management, cost modeling and system integration (ERPs, PLMs). 

The key reasons why sourcing solutions are important for modern procurement practices are:

• Enhanced efficiency: Sourcing solutions can automate or streamline many manual tasks involved in traditional sourcing especially when looking at RFx preparation and bid evaluations. This allows organizations to increase the spend they manage, among other things.
• Improved decision-making: Sourcing solutions enable users to have more structured and richer data when analyzing bids and awarding which can lead to better decisions when multiple trade-offs are at play.
• Increased value delivery:
  • Cost savings: By identifying the most competitive suppliers and optimizing negotiation, sourcing solutions can help businesses achieve more cost savings. Direct materials sourcing solutions also allow for granular cost analysis. By dissecting pricing structures and identifying opportunities for consolidation or alternative materials, these platforms can generate substantial cost reductions on direct materials.
  • Reduced risk: Sourcing solutions can help mitigate associated risks by making the sourcing process risk-aware at different critical steps.
• Increased visibility and transparency: Sourcing solutions offer real-time visibility into the entire sourcing process, allowing procurement teams to track progress and identify potential bottlenecks. They also increase the level of data shared with suppliers which is taken into account in cross-functional decision making.

• Improved compliance: Sourcing solutions can help ensure compliance with regulations and company policies.
• Best practices: Sourcing solutions help to capture, share and preserve valuable tribal knowledge that might be lost when employees leave the organization. Also, digital knowledge can be updated instantly and made available to users.
• Category/market intelligence: Sourcing solutions often contain built-in expertise in specific categories. This allows procurement teams to leverage industry benchmarks, identify new sourcing opportunities and negotiate more effectively with potential suppliers with this outside-in intelligence.

How do I know my organization is ready for a Sourcing (for direct) solution?

If a significant portion of your external spend is related to direct materials, a sourcing solution with direct materials capabilities can have a major impact on your bottom line by optimizing spend, identifying cost-saving opportunities and creating a competitive advantage for new and existing products you sell.

Some signs that it’s time to step in with a sourcing solution for direct materials might be:

1. Low adoption of your current sourcing solution: Your organization probably has extensive requirements for direct materials and needs a solution that can handle them and that may be dedicated to direct spend.
2. Inefficiencies: Your sourcing process is slow, time-consuming, manual or prone to errors.
3. Visibility: You lack visibility into your organization’s spending and sourcing activities.
4. Control: You struggle to manage contract renewals, there is a lot of maverick buying or you cannot address all incoming requests. 
5. Savings generation: You need to identify incremental cost-saving opportunities and increase the amount of spend under management.
6. Talent: Your procurement team lacks the expertise or resources to manage complex sourcing activities, or you are faced with a high employee turnover and a loss of expertise and know-how
7. Growth: Your organization experiences organic or external growth or is frequently launching new products and needs help managing the increase in volume of sourcing activities.
8. Improvement in collaboration: Your organization needs better collaboration internally and with suppliers to improve internal alignment on sourcing decisions and to improve supplier-led innovation.
9. Focus on supplier and part/material: Direct materials sourcing solutions include features for supplier and part/material discovery to find the right suppliers and materials. 

If any of the above describes your organization, it’s time to begin looking for a sourcing solution. 

Some factors to consider when beginning the journey are:

1. Business needs: What are your goals and objectives for implementing a sourcing solution, and what will be the scope (categories, geographies, etc.) of the implementation?
2. Change management: Is your organization prepared to undergo changes in processes and workflows that a new sourcing solution would bring?
3. Stakeholder buy-in: Do you have buy-in from key stakeholders like IT, finance and executive leadership?
4. Supplier buy-in and adoption: Have you identified the suppliers you want to enroll and developed an adoption strategy to ensure they will use the sourcing solution?
5. Budget: Do you have the budget allocated for implementing and maintaining a new sourcing solution?
6. Integration: Can your existing systems integrate with a new sourcing solution, or do you have the resources to manage integration?
7. Process standardization: Is your current sourcing process (roles, steps, templates, supplier panels etc.) adopted across the organization, or are there many variations?
8. Support: How will the support for internal users and suppliers be done?

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How Sourcing (for direct) is done: Common features of Sourcing (for direct) technology

Both general and direct-specific sourcing technologies enable companies to define and implement specified tendering/sourcing processes across simple and complex categories alike, starting with strategy development and ending with award decisions. 

The underlying technology components of sourcing technologies include base-level supplier management, RFI/RFP/RFQ creation, reverse auctions, bid response management, optimization, supplier collaboration (within a negotiation), template/knowledge management and category management. 

While the sourcing technology sector is highly fragmented, material differentiation exists in such areas as usability, suite linkages, opportunity detection, decision optimization and direct materials support.

Regarding direct materials, direct sourcing supports NPI/NPD (net new needs) and the overall optimization of external direct spend. Therefore, the core components of sourcing technology for direct are similar to broader sourcing (helping manage data collection efforts, bid processes, analysis and sourcing projects), but they also include certain direct-specific capabilities:

• Supplier directory and portal: A basic directory of suppliers with contact information necessary to invite suppliers to sourcing events. Also, each supplier needs a single entry point where its personnel can access the RFx and surveys directed to them, participate in competitive bidding events (including auctions), find information on the organization’s sourcing process, learn about award decisions and ask questions.
• BoM support: Multi-level bill-of-materials support including integration with PLMs and ERPs (where BoMs are managed) and the ability to leverage BoM information to initiate sourcing events for the whole or part of the BoM. In addition, sourcing events feed back into BoMs to include the results of the event (suppliers, prices) to provide a product-level view of sourcing decisions.
• Information gathering and evaluation functionality: Support for the creation and scoring of weighted questions, often organized in questionnaires, to gather and evaluate information from suppliers.
• Pricing and cost-data gathering and evaluation:
  • Via RFQ or RFP functionality. Support for creation and organization of line items in order to gather and compare primarily pricing and cost information from suppliers.
  • Deep cost breakdown across components, production process, distribution, etc. to get a more accurate picture of total landed costs and of the total cost of ownership (TCO).
  • Market feeds for raw materials and other price drivers.
  • Price management to make price updates/adjustments a faster/more collaborative process (supplier and ERPs, etc.).
• Reverse Auction: Support for online multi-party negotiations in the form of real-time submission and visualization of bids in a reverse format, meaning new bids should be lower than previous bids.
• Project/Program Management:
  • Workflow support for proprietary sourcing project models to ensure compliance to sourcing processes and collaboration.
  • Ability to manage program level metadata like volumes, start or production (SOP), etc.
• Reporting: Including an extensive collection of reports that allow the buyer to get all of the data they need in easily digestible chunks and, preferably, a powerful report builder that allows them to design their own optimized reports for each sourcing situation. It should also offer a means to export information to other reporting/analytical environments.
• Support for post-RFx activities like material qualification: PPAP/APQP, sample test reports, standard 8D & QDX complaints report, goods issue doc and others.

How technology supports Sourcing (for direct) — Top 5 capabilities

These ‘Top 5’ critical digital capabilities stem from the Spend Matters TechMatch workbench — derived from a larger number of requirements scored in the SolutionMap solution benchmark.

The Top 5 capabilities are the highest-weighted critical capabilities that are central to the displayed solution market benchmark. They have been developed by Spend Matters team of analysts and refined by procurement users in tech-selection projects using our market-proven SolutionMap benchmarking dataset and associated TechMatch decision-making tool.

1. RFx creation

The ability to create sourcing events and configure them based on various organizational, category and process requirements.

The average solution supports the creation of RFxs from templates, Excel uploads, scratch, past events and BoMs. Creation from a BoM allows users to include a limited set of information (part number, description, quantity) in sourcing events. Direct-materials sourcing solutions allow more advanced item/lot-level configurations than generic sourcing solutions, e.g., more in-depth cost breakdowns. However, the calculations these solutions can do and external data feeds that can be used in price sheets are limited. Similarly, average solutions offer sourcing automation, but it is limited to simple tasks like supplier invitations and bid acceptance (but not award).

Top performing solutions provide more guidance when creating RFxs by recommending content, e.g., which template to use or which suppliers to invite. They do so by using AI/ML to surface content and recommend specific actions, which extends their guidance beyond predefined rule-based workflows. RFxs can be configured in many different ways with settings at the item/question level to ensure that all elements required for decisions are collected. RFxs created from BoMs inherit rich item-level information, and some leading providers support use cases like the management common parts (same part used in ‘n’ BoMs pushed in a consolidated RFx) with ability to aggregate/split volumes (including cases of multi-year programs) across BoMs.

2. Bidding and analysis

The capacity to enable suppliers to bid in the most appropriate way and to allow us to analyze/compare offers in various and detailed ways to ensure the right decision-making process (TCO, ESG, etc.).

The average direct materials sourcing solution offers suppliers simple means to enter their bids (including alternatives) with basic response validations in the form of drop-downs, format checks for dates and email addresses, simple arithmetic operators, etc. The same applies to the feedback they can receive; it is limited to the ability to export reports to Excel that show average bid/score and each supplier’s bid/score.

Buyers can score each bid manually, and they can compare offers in a side-by-side view. Also, analyses are limited to ‘Buy’ decisions, as the solution supports comparison only with pre-loaded incumbent prices.

Top performing vendors offer suppliers advanced AI/ML-based capabilities to prefill answers based on historical data and, in the absence of historical data, to give advanced price predictions based on the market and the particulars of the buying organization, supplier or individual. Suppliers can also get detailed feedback on how they perform compared to the competition. They can enter complex bids and price schemes using functions and market data. In addition, they can propose multiple alternatives and even entirely new products or services.

From an evaluation standpoint, these solutions support cross-functional processes where each participant sees and scores only what they are supposed to. Answers from stakeholders can be weighted and analyzed based on various criteria. Analysis and comparison can be on all or just some offers from all suppliers (including alternatives). Some leading providers support a complete ‘Make or Buy’ decision process, for example by giving users the ability to compare BoMs in a side-by-side view using various costing scenarios (e.g., make vs buy, incumbent vs potential new suppliers, different award scenarios and so on) and to allow suppliers to submit their own alternative design suggestions.

3. Category intelligence

The ability to provide outside-in intelligence to enhance the sourcing process to ensure that ‘money’ left on the table is minimized.

The average direct materials sourcing solution allows customers to collect and cement internal knowledge about categories by enabling users to enter information on categories and category strategies to ensure they are known and applied in sourcing events. In addition, they can build simple category-specific KPIs using the platform analytics ability.

Top-performing vendors go beyond this by providing their customers with outside-in intelligence on markets and categories. This intelligence covers data feeds for forecasts (price trends and history) and highly specific third-party sources for both opportunity identification and risk reduction.

Customers can use that knowledge to build their own category strategies and use external cost data to maintain commodity pricing and trends over time by category and item. Certain providers even leverage their analytics capabilities and data model to support category strategization and also price management (vs. market/community price) processes.

4. Guided sourcing

The capacity to augment users by providing recommendations in terms of process and/or outcome.

The average solution includes some level of guidance that is mostly based on pre-defined rules. The purpose is to provide user support via rules-driven wizards while ensuring compliance with internal processes and best practices. Pricing guidance is based on differentials between prices in bids and historical/current prices.

Top performing vendors go beyond guidance about how an event should be built to recommend when an event should be launched and what outcome should be expected. Some providers use community intelligence (based upon similar events from other users) and even ML/AI that can analyze supply/demand signals, market events and related cost changes (transportation, duties, etc.) and dynamically adjust pricing and category guidance in real time to identify unique or time-sensitive opportunities.

5. Project/program management

The ability to support collaboration (tasks, milestones, project/program-based sourcing) before, during and after sourcing events.

Direct materials sourcing requires internal and external collaboration because of the nature of what is being sourced — materials, complex sub-assemblies, etc. — and because direct materials sourcing is often project/program-based (customer projects, NPI/NPD, etc.).

The average sourcing solution supports the definition and management of projects, tasks and milestones at a high level. Tasks and milestones can be defined against projects by simply tagging stuff to a project ID/name, include dependencies and can be tracked in terms of status and progress. Sourcing events can be linked to a related project or program.

Top performing providers have solutions that have project management features similar to best-of-breed project/program management tools. Customers can create complete project workflows, manage and plan (and, when required, reallocate) associated resources. They can also drill down into specific projects by using interactive dashboards with customized formula-based KPIs. Some providers link projects/programs and all related RFx by, for example, pushing relevant details from the program (SOP, EOP, part numbers/description, multi-year program volumes) in sourcing events and feeding back the project/program with the outcome of the individual RFx (status, pricing, etc.).

Why selecting Sourcing (for direct) technology can be difficult

Selecting any technology product can be difficult for a variety of reasons, but we will highlight some of the most important factors you should consider when starting this journey below:

• Market characteristics:
  • The sourcing technology sector is large, complex and fragmented, with a diverse range of vendors that sometimes specialize in specific areas. This multitude of options can be overwhelming for procurement organizations looking to find the best fit for their specific needs. 
  • New features and functionalities are constantly emerging. Keeping pace with the evolving landscape and selecting a solution that can scale with future needs requires ongoing research and evaluation.
• Interoperability:
  • Sourcing is at the crossroads of many other S2P activities, such as supplier management, contract management and ordering, that all rely on it at some point. In addition, sourcing depends on other processes like supplier management as the efficient and effective selection of suppliers and awarding requires data beyond price (performance, risk, etc.).
• Configuration management: 
  • Despite sourcing processes being well known and established, there are multiple variations, even within an organization. Therefore, the need to configure a solution to fit with potential specific requirements is often an important activity. And, not all solutions have the same degree of configurability nor the same approach to configuration management (self-service by customers, via support tickets, etc.).

How Spend Matters can help you select Sourcing (for direct)  technology

Spend Matters specializes in procurement technology diligence. In addition to projects and advisory, Spend Matters offers Insider, the only membership community and technology comparison and selection tool of its kind: access to Spend Matters SolutionMap vendor rankings dataset combined with independent, zero pay-to-play, brutally honest coverage of solution providers, market developments and trends affecting procurement, finance and supply chain. 

We can help you find a solution that:

• Can support the transition from manual (email, Excel, etc.) sourcing processes to 100% digital processes for direct material sourcing.
• Has the required configurability to be tailored to your specific needs and processes in a self-service mode or via support, depending on your capabilities and preferences.
• Provides outside-in intelligence to enhance decision making processes.
• Enables users to deep dive in costs and run various scenarios.
• Can augment your teams by providing guidance and insights at every step of the sourcing process.
• Provides features to support new product introduction and development and other sourcing programs in collaboration with internal teams and suppliers.
• Supports product-level (BoM) management and visualizations to ensure that individual sourcing events and decisions are coherent at product level.

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in making informed procurement technology selections and to drive successful adoption.

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Discover Sourcing (for direct) vendors

These are the vendors we are covering today (or very soon). Visit their vendor directory pages on Spend Matters for a quick vendor overview, demographic information and relevant articles, including vendor analyses.

Vendor	Description
Corcentric	Corcentric is a comprehensive S2P offering born out of Corcentric’s various acquisitions over the last decade. Corcentric’s sourcing tool stands out for its capabilities for better decision-making, cost identification and strategic sourcing opportunities across various spend categories, including direct materials and services.
Coupa	Coupa is a leading S2P platform that offers a user-friendly interface, automated sourcing processes and opportunities for cost savings based on its large user community.
ebidtopay	ebidtopay follows a single-source-code approach with many configuration and customization options without the need for coding changes. Its sourcing capabilities cover category management, RFx management, e-auctions and savings management for direct and indirect spend.
GEP	GEP is more than a technology provider. It offers a full range of services, including market/category intelligence, supplier management services and BPO. Its natively integrated suite covers sourcing including category management, cost and should-cost modeling, opportunity identification and sourcing execution that can be used for indirect and direct.
Ivalua	Ivalua offers a natively integrated, intuitive and very flexible suite that includes sourcing. It has capabilities for all types of spend, including direct materials. Ivalua enables organizations to streamline sourcing, optimize supplier relationships and better outcomes through cross-functional collaboration and cross-process fertilization and integration.
Jaggaer	Jaggaer is a prominent sourcing technology provider known for its comprehensive sourcing suite covering all types of spend that it built over time through multiple acquisitions. Jaggaer’s platform also offers sophisticated direct materials sourcing capabilities. Its solution empowers organizations to drive strategic sourcing initiatives and optimize procurement processes.
Jiga	Jiga covers the sourcing (RFQ automation module) and ordering (PO collaboration and tracking modules) of manufactured parts. It enables and enhances these processes with capabilities related to supplier discovery in its network of vetted companies, extended collaboration on RFxs (including design of components) and orders (confirmation, tracking, etc.) and system orchestration with integrations.
K2 Sourcing	K2 is a provider of RFx and auction management software that serves the mid-market in North America. It has built a loyal customer base and is using only organic growth to fund its operations. This ‘steady as she goes’ mindset has resulted in a solution that provides strong support for key e-sourcing functionality and even some unique features that prove the vendor has years of experience collaborating with procurement organizations.
Keelvar	Keelvar is an innovative sourcing technology provider known for its AI-powered sourcing optimization capabilities. Leveraging artificial intelligence, Keelvar streamlines sourcing processes, enhances supplier collaborations and drives cost efficiencies by providing automated sourcing strategies and optimization algorithms for effective direct material procurement.
LevaData	LevaData’s solution focuses on cost optimization, NPI/NPD and supply risk. It continuously enhances its deep data management capabilities (suppliers/manufacturers monitored in the platform, data on parts) to cover categories beyond electronics, its initial focus. This means that the platform constantly monitors every known data attribute at the part level to detect opportunities. LevaData taps into a broader range of research, public information, partner sources and news sources to inform the trends and predictions relevant to customers.
MeRLIN	MeRLIN is a suite provider focused on direct materials. Its sourcing module covers tools for project management, supplier discovery and supply chain optimization to drive cost efficiencies and enhance sourcing outcomes.
MESH	MESH is only a few years old and focuses on direct materials to enable manufacturers to centralize and streamline their strategic sourcing, digital procurement and supplier management. Its sourcing engine is well suited for manufacturers (material management, deep cost breakdowns and support for CAD/CAM files).
Onventis	Onventis serves the European mid-market (with a focus on German-speaking countries). It has been incrementally building and expanding its S2P suite and offers a supplier network. The solution has robust capabilities for indirect and direct.
Part Analytics	Part Analytics is a sourcing solution for direct materials that focuses on analyzing BoMs to help identify savings opportunities and drive compliance. It leverages a wealth of data on electronic assemblies to identify savings opportunities and risks by providing users with a view of cost, risk and technical information.
Procurence	Procurence’s Meercat is primarily and historically a supplier management solution that provides robust capabilities to manage suppliers of direct materials and is particularly well-suited for customers with deep and complex SPM/SQM requirements. It is expanding to address sourcing with a focus on direct spend.
Supplios	Supplios targets the manufacturing industry (specifically discrete manufacturing, such as automotive), including many industry-specific workflows spread across the highly complex long-running supplier/manufacturer lifecycle. The solution has a user-friendly interface and enables self-service configuration. It covers supplier management (supplier performance, supplier quality (audits, SCAR/CAPA, PPAP/APQP), supplier onboarding and supplier compliance management) and direct materials sourcing (RFx with a tabular [Excel-like] quote sheet, no e-auctions) from scratch, an intake (sourcing request) or templates provided in the platform.
QAD	QAD is a provider that has a broad offering (including ERP). It acquired Germany-based Allocation Network in January 2021 to build its sourcing capabilities. The company focuses on direct spend for manufacturers and industrial companies with a sourcing module that supports all types of sourcing events, from the simplest to the most complex. Customers can create detailed cost modeling to deep dive into cost/value elements and drivers to compare offers with a TCO approach and even includes bonuses/penalties on top of suppliers’ quotes.
SAP Ariba	SAP Ariba is a leading S2P suite platform known for its comprehensive capabilities in multiple verticals and for all spend. Its sourcing offering covers all the expected functional blocks. The company recently launched a category management module that it will continue to enhance.
Zumen	Zumen is a complete direct material procurement lifecycle execution platform for teams involved in new product launches and in the continuous optimization of existing products. All the NPD and purchasing activities are centralized in a single, transparent recording system that integrates easily with its ERP, product and engineering tools. The no-code platform is extensively configurable to match customer requirements and includes an integration framework to connect the solution with other systems.

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Glossary

Term	Definition
Advanced product quality planning (APQP)	The process that ensures a new product is designed and developed to meet customer requirements.
Bill of materials (BoM)	A structured list of components, parts and materials required to manufacture a product or assembly. It provides detailed information on the components needed and their relationships.
Category management (CatMan)	Category management in procurement is a strategic method (or discipline) that treats procurement categories as ‘business units’ rather than isolated purchases. It strategically orchestrates procurement activities based on specific spending categories, with a focus on adding value through ongoing analysis to anticipate trends, mitigate risks and adapt to demands or supply changes. It strategically manages categories throughout their lifecycle involving long-term planning, market analysis and relationship-building with suppliers
Cost breakdown (CBD)	An itemized list of all the expenses that go into making or providing something, like a product or service. It breaks down the total cost into its individual components.
Enterprise resource planning (ERP)	A software system used to manage and integrate core business processes such as finance, human resources and supply chain management.
New product introduction (NPI) and new product development (NPD)	These terms refer to the processes involved in bringing a new product to market, from initial ideation to final launch. NPI focuses on pre-optimizing and negotiating the best components for new products, while NPD involves the overall development and creation of new products.
Product lifecycle management (PLM)	Software that helps companies track, manage and share product information throughout the entire product lifecycle.
Production part approval process (PPAP)	The process to confirm that a supplier can consistently produce parts that meet the agreed-upon quality standards.
RFQ/RFI/RFP	Requests for Information (RFI), Requests for Quotation (RFQ), or Requests for Proposal (RFP)
Sourcing execution	Sourcing execution refers to the process of carrying out sourcing activities such as managing market approaches, running RFxs (development, execution and award), conducting e-auctions and managing portfolio/performance in the context of procurement.
Strategic sourcing	Strategic sourcing follows an event/process-based approach, focusing on immediate cost savings and supplier selection, negotiation and contract management. It aims at selecting the right suppliers and negotiating the best pricing to meet business objectives.
Total cost of ownership (TCO)	The total cost associated with acquiring, owning and using a good or service, not just the initial purchase price.