5 Challenges Faced by Sourcing Professionals and How to Solve Them
Sourcing professionals around the globe face increasing challenges and demands, and that was true even before the pandemic. Siloed systems have historically slowed down the supplier onboarding and source-to-contract process.
But flexible contract lifecycle management (CLM) solutions can enable new agility in the sourcing process, especially if they are extensible enough to bring sourcing professionals directly into the contract management process.
In order to find the right solution, we have to look at the bigger picture of where contracting sits in the enterprise, which is at the center of commerce. Sourcing and supplier management is just one piece of the larger commercial ecosystem that expands outward to include revenue management, CPQ, eBilling, legal request and other areas.
A helpful sourcing solution focuses on the buy-side events leading to the contracting process and also leading from the contracting process. To understand what this means on an operational level, we must dig into some of the challenges that procurement and sourcing professionals are experiencing in these areas of the Source-to-Pay business process.
5 Key Challenges in Sourcing
While talking to customers, the staff at Agiloft discovered that sourcing and procurement professionals are under a lot of pressure in the constantly shifting business landscape. Here are the biggest challenges sourcing professionals say they are facing:
1. Supplier Consolidation
Sourcing professionals are under pressure to consolidate the number of suppliers they work with to reduce complexity and gain greater buying power.
2. Complex and Manual Process
There is also a pressure to perform. Existing sourcing processes are complex and often manual. Getting all of the stakeholders lined up on a sourcing project takes great effort and bottlenecks in the process result in slipped deadlines.
3. Optimizing Spend
Sourcing teams are under pressure to optimize spend. Sometimes that means trawling through contracts to uncover volume discount opportunities.
4. Quality and Compliance of Suppliers
Sourcing teams are also under pressure to do their detailed due diligence to help stakeholders select the right supplier. Not just one that can deliver on the goods or service, but also one that meets the ever-changing compliance requirements of the buyer.
5. Siloed Data in Multiple Systems
Siloed data in multiple systems makes it difficult to optimize the sourcing and contracting process. Different user experiences make it difficult for procurement and sourcing professionals to optimize the larger source to contract process.
The Solution? Flexible CLM with Sourcing in Mind
These challenges demand a more extensible CLM platform with sourcing-specific functionality that gives sourcing and procurement departments the tools to:
- Improve decision-making by centralizing and streamlining the source-to-contract process. Users can create standardized templates with pre-approved language for RFIs, RFPs, and RFQs.
- Save time and automate supplier information management by allowing prospective suppliers to register and provide information through the portal and gather responses on security, diversity and business criteria.
- Tap into a holistic source-to-contract CLM platform to quickly identify existing suppliers. Gain visibility into supplier relationships and contracts across your company, including viewing terms, scope, pricing and volume discounts.
Going Beyond CLM with Sourcing and Supplier Information Management
Gone are the days of glorified contract repositories passing as solutions. The modern CLM solution has expanded beyond the legal and compliance teams to include workflow automation and data streams for sourcing, sales and now the entire enterprise.
However, all CLM systems are not created equal. The best-in-class systems provide a flexible platform that can easily extend to automate contracts and also processes adjacent to contracts, like sourcing and supplier information management, while providing visibility on the entire commercial ecosystem.
We encourage anyone looking into a CLM solution to research trusted customer review sites like Gartner Peer Insights for an honest take at the industry’s leading CLM vendors.
To learn more about going beyond standard CLM with Sourcing and Supplier Information Management, please follow Agiloft on LinkedIn.