New Digital Tools for Improving Vendor Sourcing and Procurement Management
According to a recent study commissioned by Blur Group, 87 percent of U.S. decision makers in procurement and vendor management agreed that they would like to partner with new service providers, though 71 percent felt they had little freedom to develop new partnerships.
Despite their desire to contract new vendor partners, many companies struggle to do so. Instead they maintain their current contracts, even when resulting inefficiencies convolute their supply chains. For such companies, new technologies are emerging that will vastly improve their sourcing of new and better service providers and vendors. Though the functionalities of these online B2B networking, sourcing and procurement management tools vary from service to service, they all aim to improve the buyer-seller relationship and, overall, to improve the supply chain.
The New Way to Procurement Management and Sourcing Vendors
As businesses increasingly turn to outsourcing and the supply chain grows more complex, it is more important than ever that businesses maintain a strong buyer-seller dynamic. At the same time, practices for sourcing and procurement management hasn’t kept pace with demand.
Here are some examples of traditional procurement management methods:
- Searching the phone book or Internet
- Seeking referrals from friends and colleagues
- Networking with the (somewhat relevant) attendees at industry trade shows and conferences
These methods function to a certain extent, but they are not optimal. For starters, they do not sort potential vendors by relevancy (creating a more time-consuming search process for procurement management professionals), and they limit businesses to prospects within their own network (rather than connect them with highly relevant vendors around the world with whom they do not yet have a connection).
New technologies are now available to complement – and in some cases, even replace – traditional sourcing methods, allowing businesses to source new, more relevant service providers while expending fewer resources.
Comparing Sourcing and Procurement Management Tools
While finding a new vendor is still an on-your-own research process, there are infinitely more creative ways to go about it. The options available to procurement professionals today via e-commerce and online B2B networks such as Alibaba, Linkedin and Powerlinx combine the best of traditional sourcing methods with capabilities offered by new technologies. These services offer vast yet highly tailored partnership opportunities while allowing businesses to maintain control over the sourcing process. The benefits of incorporating these technologies into the sourcing process could be huge for younger or boutique companies and large or long-established companies alike.
While the goal of these networking services is, generally speaking, to effectively connect businesses in a mutually beneficial capacity, each service offers unique capabilities. The following table compares the offerings of the leading three online sourcing tools:
Online Procurement Management Tools: A Comparison
|Alibaba||Portal for importers seeking suppliers and products in China|
|Resource sharing, networking and online business community building|
|Powerlinx||Business-to-business connections based on synergistic goals|
Procurement management specialists need to consider where their company most needs support in the sourcing process, and choose the sourcing tool(s) that will best meet their needs.
Tools for Better Buyer-Seller Relationships
Not only do e-networking tools like Alibaba, LinkedIn and Powerlinx provide businesses an expansive new pool of sourcing options, but they also facilitate buyer-seller relationships that are far more targeted to businesses’ needs. Using a trusted, vetted online tool to source new suppliers, service providers and/or vendors ensures that both the buyer and the seller will share not only goals, but resources and information as well, further facilitating a secure and mutually-beneficial relationship.