What is Source-to-Contract Technology and how is it used?
Source-to-Contract (S2C) technology facilitates the upstream procurement process by standardizing and automating sourcing activities such as Contract Management, Spend Analysis, Supplier Relationship Management, eAuctions and eRFx. The full S2C cycle is shown below:
Proven benefits of S2C tools include:
1. The ability to leverage sourcing data quickly, easily and accurately: Instead of spending considerable time and effort to retrospectively and manually analyze your sourcing data simply click a button and run real-time reports on:
- Number of sourcing events run
- Sourcing cycle time
- Number of participating suppliers
- Savings generated
- Categories covered
- Contract status
- Contract expiry dates
- Supplier accreditation etc.
- Supplier pricing from previous sourcing events
- Supplier pricing trends
- And more
Additionally, the potential for human error in the data collection process is eradicated. With such quick and easy access to accurate sourcing data, decisions can be made and strategies devised when you need, rather than wait for when the business gets around to it. Your decisions will be based upon documented stats and not on intuition.
Finally, benefit-tracking reports can show the true value and impact of your sourcing team, rather than savings figures being diluted (i.e. reinvestment, etc.) by the time annual figures get to the board.
2. Increase spend under management: By digitalizing sourcing, procurement professionals are essentially automating and streamlining processes, enabling them to speed up each project cycle time and ultimately increase their percentage of spend under management.
- Click on a category and all suppliers registered to that category will appear, ready to be invited to the sourcing event
- The software will collate and analyze supplier responses, providing buyers one comprehensive report with all qualitative and quantitative data compiled ready for further analysis
- Push RFx data through to another round of bidding or to an eAuction
eAuctions have been proven time and again to increase savings and significantly reduce negotiation cycle time (average eAuction lasts less than one hour) without compromising quality. Managing the supplier on-boarding and approval process is highly streamlined as suppliers independently register by responding to questionnaires and uploading key documents and then await approval.
3. Increased internal and supplier compliance: Digitalization effectuates more structure, visibility and control to daily activities. Sourcing processes can be more easily standardized (and adhered to) using workflow technology and management can access project status dashboards to see which projects are on time and which are behind schedule. Regarding supplier compliance, having all data readily available online with reports, notifications and flags to alert the buyer of none-compliance, the benefits are many.
4. Improved auditability: As the whole process (supplier on-boarding, RFx, messaging, supplier responses, award decisions, internal notes, etc.) takes place on one platform, there’s no need to be constantly digging around for emails and hunting through spreadsheets collating information for audits, all the data is in one place. Furthermore, audit logs show not only what has been done, but exactly who did it and when.
Pull data from your organization’s existing Enterprise Resource Planning (ERP) and Financial Management Systems (FMS) software and then cleanse, categorize, enrich, and normalize it using rules, machine learning, and third-party integrations alongside human, manual checks.
The enriched data is displayed across multiple dashboards that highlights spending spikes, savings opportunities (both operational and financial), compliance issues, and potential risk. Users can drill down and filter the data across multiple dimensions and levels of depth and detail.
Supplier Relationship Management:
Automate and streamline the supplier on-boarding process by making suppliers responsible for uploading such information as certificates, contracts, accreditations, and other documents through a supplier portal, which expedites risk evaluation and the approval process.
With all the supplier information in one place, your team can ensure all potential and awarded suppliers remain compliant and that accreditations and certificates are up to date; collect ad-hoc information from the supply base to mitigate against disruptions (e.g., COVID-19 disruption); and comply with new laws and regulations (e.g., Modern Anti-slavery Act). You can also monitor supplier performance against agreed KPIs.
Automate and streamline the vendor selection process to award RFP/RFQs in a fraction of the time of a manual approach. eRFx manages risk, increases visibility and improves compliance, all of which result in reduced cycle times and cost savings.
Importantly, massive quantities of complex data points can be collected and organized to make data-informed business decisions. A library of templates and questionnaires and the ability to tailor negotiation settings within the platform ensures compliance and efficiency. All historical information is benchmarked for future sourcing events to enhance speed to market and more easily manage supply risk events.
Pitch shortlisted suppliers against each other in a highly competitive eAuction environment to quickly and effectively drive down costs and uncover true market prices.
Multiple eAuction types and customizable settings enable all levels of market competition to be catered for, all price and none-price factors to be taken into consideration, and any real-life scenario can be replicated. Typical reverse English eAuctions take less than an hour to run, meaning that weeks of face-to-face negotiations can be condensed into as little as 30 minutes.
Digitize and streamline contract authoring, red-lining, approval and signature processes, while increasing visibility and accessibility of contract data and documents.
Through the use of approved contract clause libraries, automated approval workflows and eSignature functionality, a contract management solution can significantly speed up manual admin-heavy processes and eliminate paper-based elements. Reporting and dashboard functionality give far better visibility and control of contracts, and expiry reminders help mitigate against costly contract over-runs.
Manage a range of key business processes via a highly configurable Project Management module. Project Management brings the ability to collaborate with business stakeholders across a range of functions. Seamlessly conduct purchasing projects with the integration into the eSourcing and Contract Management modules. Setup a range of highly configurable project flows, project template forms and project request forms to support your business process activity.
Finally, advanced search and reporting features offer the ability to quickly gain visibility and track key project measurables throughout the organization. Project Management significantly enhance spend under management, the quality of cross-divisional collaborative activity and insight into critical KPI’s such as time to deliver projects and savings.