Source to Contract Solutions

Source-to-contract (S2C) is a collective term used for a set of procurement processes supporting the sourcing of products or services. Typically, the process will begin with the analysis and development of the sourcing strategy relating to the particular product or service. Procurement teams will then often utilize various tools to ensure the best value at the contracting phase and S2C software can support the following activities:

• Category Management
• Supplier Management
• E-Rfx and E-Auctions
• Contract Lifecycle Management (CLM)
• Spend Analytics

Having the right tools in place can really support the decision-making process when it comes to supplier selection and onwards to contracting, the focus needs to be on efficiency, transparency, and value.

Let’s take a deeper dive into these key areas:

Transparency
Every tender and qualification process should be transparent end to end from procurement strategy development to selection and contracting.

Efficiency
As a procurement leader, you might consider that the processes involved in Source to Contract are wasting precious time, resources, and money. Assurance is needed that they are as effective and efficient as they can be.

Value
It is important to have the assurance that you have the right tools and processes in place to support a reduction in procurement costs and ultimately achieve higher operating profiles. On top of this, the focus should be on streamlined operations and assurance of best value through effective supplier selection, evaluation, and negotiation.

Let’s now consider how utilizing the right S2C tools and software might help with key processes and driving the 3 focus areas we can apply to the end-to-end sourcing process.

Strategy – Sourcing and Commodity strategies need to be clear, open, and focused. Adopting a category management tool can support strategy creation, helping to standardize, prioritize and ensure consideration of company initiatives.

A move to the use of Digital Category Management tools is a worthwhile consideration; it can help you identify, prioritize and ensure focus on the most important procurement initiatives. A tool that can support AI and automation can support in the strategy phase by making suggestions to optimize your categories and align with key business goals is well worth consideration. Efficiency savings will be key opportunities here as the tool can guide procurement professionals through the process and automate where appropriate.

Selection – Tools such as ERfx and E-Auction can support transparency relating to assessment scoring and negotiations during the tender process.

ERfx software can really optimize tendering processes, allowing procurement teams to draft, issue, and analyze RFPs, RFI, and RFQs in one centralized tool. ERfx not only supports automation & reduces admin, there is increased control of the strategic sourcing process and opportunities for leverage by increasing vendor knowledge. Additionally, procurement teams are having to adapt to remote working, and E-Auction software can drive accuracy and competitiveness without the need for error-prone individual negotiations.

Contracting – A Contract Lifecycle Management (CLM) solution which can support real-time vendor and contract information, spend analytics and automation can really help support the development of best value during the contracting phase, help minimize risk and ensure traceability of all approvals.

The CLM process is typically time-consuming and the number of processes tends to be high. Having a centralized repository for all contracts is a quick win. CLM tools can enable more efficient contract management with a focus on automation such as tracking KPIs and SLAs, contract coverage, payment terms, and much more! An effective CLM solution can also deliver contract handling automation such as notifications of important milestones to all stakeholders and tracking of price changes and supplier performance.

Summary

Automation in the upstream procurement process is absolutely key to unlocking the best performance and value of your contracts.

Ultimately, the reduction of task-heavy, time-consuming processes can be done by utilizing the best-in-class S2C tools on the market. It can really help drive the move to efficiency and optimization in the upstream procurement process. Having everything connected increases knowledge about suppliers, offers better opportunities for leverage and increases control of the end to end strategic sourcing process.