Outsourcing and eSourcing

Add comment March 30th, 2007 David Bush - Iasta

There is an online publication named Outsourcing Journal which recently ran a story on eSourcing technology and they got some very interesting quotes for the story, namely from Moi. Obviously, I am not going to run many opinions out here on the story, because my opinions are already in the story. I will say, the journalist did a nice job of getting up to speed on an issue that she was not educated on previously. Her conclusions were summarized as:

Lessons from Outsourcing Journal:

• The lower middle market manufacturers (with $30 - $200 million in sales) tend not to use strategic sourcing or technology solutions, as in-house purchasing staffs are more focused on making sure materials arrive on time. Outsourcing is a cost-effective way to access automated sourcing solutions.
• The Software-as-a-Service model eliminates the high maintenance and ownership costs typically associated with sourcing technology.
• Every business has constraints involved in the sourcing-decision process, making it too complex to simply award contracts to the lowest-price suppliers. World-class e-Sourcing technology uses the industry’s most powerful decision-optimization engine, enabling analysis of complex award scenarios with constraint-based mathematic modeling.
• Many people mistakenly believe that e-Sourcing and reverse auctions are the same thing. But a reverse auction is only one tool in supply management and e-Sourcing.
• Choose an e-Sourcing solution that has collaborative functionality in the RFP and RFI components of the technology. A buyer can collect a large amount of data from suppliers, run it through different sourcing scenarios, and then go back to the suppliers with suggestions on what they should do or an area where they should lower a price in order to get more of the buyer’s business.
• An outsourcing provider’s good customer service is an important component of a solution and, in a supply chain process, has a domino-effect impact on many companies throughout the supply chain.

Entry Filed under: General, Supply Management Best Practices, Technology, e-Sourcing Marketplace