Evaluating Sourcing and Procurement Software

ProcurementSourcing and Procurement (SAP) are the fundamental roots of supply chain management. As disciplines they are very often talked of in the same vein but each has its own meaning.

In its broadest sense, procurement is taken to cover the whole procurement process from start to finish; a process which can be broken down into several sub-sections – of which, sourcing is one.

The evolving meaning of the term sourcing and procurement

The truth of the matter is that supply chain management (SCM) is a continually evolving process, which means that the language it uses, and the semantics involved, change as fashions develop and new processes become defined. Sourcing and procurement are two good examples. Not only does their meaning evolve and change  as SCM develops, but different companies have different takes on their definitions, in conjunction with their individual business practices, market sectors, and sizes of company.

For some businesses, procurement is a wide concept that incorporates design, fixing of standards, negotiation, and processing, as opposed to sourcing, which encompasses overseeing the commercial aspects of procuring the product or commodity, and tracking the deliveries until such time of that those products or commodities are delivered to site.

Aspects of procurement include the sourcing of products and/or services at the best possible price in the right quality quantity time and place from the preferred supplier; a process that is often governed by a specific contract.

At their most simple roots, sourcing and procurement are the same thing. However, as organizations expand and become more complex, procurement tends to take on more aspects than simple sourcing. It’s at this stage that sourcing becomes a separate sub-process to the all-encompassing procurement process.

Sourcing and Procurement Software

As far as most large global supply chains around the world are concerned, sourcing and procurement come packaged together, incorporated into e-Procurement software packages or genetic supply chain management software packages; either as off-the-shelf products, or custom designed offerings. The marketplace for such software has proliferated and choosing the right software for you particular company and your individual chain is no easy matter. So we here at Supply Chain Station are going to give a few tips and what to look out for and how to differentiate what it is you need.

One common mistake that many people make when looking to evaluate sourcing and procurement software is in getting too bogged down with the fine details; the minutia of each aspect of a program. What you really need to do is to concentrate on finding something that mirrors you needs and requirements. Something that will make the same sort of decisions you make manually, using the same qualification criteria. Anything else is irrelevant as long as it doesn’t interfere with your prime needs.

Traditional or Cloud?

The first big decision when examining what sourcing and procurement software is available is deciding which way you will jump. Will you opt for a traditional in-house installation based system, or will you go down the modern computing in the cloud practice, and choose an SaaS (Software-as-a-Service) program? Don’t forget that the program you finally end up selecting will need to handle compliance issues such as accounting practices.

Helpful checklist

Here’s a quick checklist you can refer to in order to help you in your evaluation process:

  • Are you concerned with direct or indirect procurement or a combination of both? Does the system you are evaluating meet these requirements?
  • Is the system fully compliant with the local accounting practices that are applicable in your location?
  • Ask yourself how the program will support your current sourcing and procurement practices.
  • Does the system have specific protocols that you could find inhibiting?
  • Does the program you are considering offer improvements to your existing process?
  • Will the program dove-tail into any existing supply chain software you’re running, or can its output be modified to do so. Can it produce reports to allow manual updating?

Using the services of a good, independent supply chain software consultant

You may already work with a supply chain management software consultant who can help you with your search for the right sourcing and procurement software. If you don’t, there are plenty of good companies around and with the ever-changing complexities of global supply chain and supply chain software it’s a good idea to go and find one you feel you can work with. If possible they should be an independent rather than a stockist or supplier of any specific software. That way you can be more certain of getting an unbiased opinion.

SAP – Sourcing and Procurement Solutions

One of the best suppliers of sourcing and procurement software is SAP based in the USA. They have a presence in over 130 countries worldwide. SAP is at the centre of today’s supply chain software revolution. They offer to empower procurement teams with their software, helping to maximize inefficiencies and reduce costs. They provide training and support.

If you’re in the market for sourcing and procurement software, SAP is a good place to start. Like most large, successful companies they are intent on selling their existing product range (which is has to be said is quite extensive). But whatever you do when dealing with companies like this, it’s important not to just sit back and let them make their pitch. Remember that you’re the buyer, and at the end of the day, you know best what you need.

Grandma and Eggs

In closing let’s just say that it’s up to them, and companies like them to offer you what you need, and not just what they want to sell you. But hey, what’s that they say about grandma and eggs?  The odds are that if you’re reading this, you already know that!

Are you happy with your sourcing and procurement software? Did you find it difficult to source? What are your recommendations to any of your peers who are going through the software evaluation process?

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