The beauty of sourced contract systems is that they end up driving value for your business while also ensuring you get what you pay for. Realizing negotiated contract benefits is only a small part of the overall whole. There’s still the matter of finding and sourcing reputable suppliers while also engaging in new strategies for optimizing your supply chain. Throughout procurement and sourcing, you’ll undoubtedly run across various challenges. Overcoming these obstacles and rising to the occasion is all part of a hard day’s work for any team. To drive better business for your organization, consider using source to contract systems. These are robust automated enterprise management systems that can help not only keep track of things but also streamline everyone’s workflow. Here’s how these types of systems can help your organization today.
Find New Opportunities
Source to contract systems tend to put the contracting phase on the outside of the sourcing process. This means it’s easier to find new opportunities to work with better suppliers over time. Generating new opportunities leads to growth, scalability, and revenue while also allowing you to continue running your operations smoothly.
Integrate Purchasing and Invoicing
To really streamline operations, integrate your purchasing and invoicing together. The two departments should be able to work together to create a comprehensive and smooth experience for suppliers. Integration reduces the time it takes from sending the requisition to generating the PO and finally submitting an invoice for payment. This effectively reduces the margin of error, reduces costs, and automatically routes expenses to their correct ledgers. Although this helps the operation itself run more efficiently, it also makes things easier on the suppliers. They’ll receive payment for their services and be able to communicate more effectively with your team. You’ll be able to follow established protocol and maybe even get a few discounts by using software to streamline the entire process. It’s a win-win situation for both the company and suppliers because it’s an all-purpose solution to common supplier problems.
Vet Suppliers
The engine driving most businesses is their relationships with their suppliers. Selecting suppliers is a lot like buying any home or life insurance. It’s an extensive, high research process that requires attention to detail.Suppliers are the force behind most of the product on materials the business may be using. It is important to work with them and have a functioning, symbiotic relationship. Part of that involves vetting them before making a contract with them. The best way to vet suppliers is to start with the foundation of setting up exactly what you expect. Define supplier selection criteria and outline what would be a deal breaker throughout the process. Define what quality is the supplier must have in order to work with you. Next, check out their reputation the track record. If they have a risky history, they may not be worth working with. Find out what their expectations are for payments and delivery of goods and see if it fits with your companies established protocols. Capacity, competency, communication, and numerous other criteria should be at the top of your mind when getting your suppliers. Software lets you establish criteria and that your suppliers conveniently without taking up a lot of extra time.
Manage Third-Party Risk
Risk is a significant issue in sourcing and contracting. Supplier risks can cause big issues throughout an organization. Sometimes managing risk involves transparency and communication. Other times it means building a diverse stable of suppliers to suit every possible. Then there’s making sure you have Risk insurance and other forms of insurance to help reduce risk across the board. Reviewing suppliers for risk is also vital and should happen frequently. Remember that high quality source to contract software will help you manage third-party risk. With a reinforced management system in place, you can manage and mitigate risk without worrying about profit loss or other fraud/spend issues.
Realize Benefits
At the end of the day the entire purpose of the contract is to realize the benefits negotiated from it. Suppliers need to hold up their end of the deal. If they’re not meeting the standards of the contract or you’re not realizing the negotiated benefits, it might be time to go in a different direction. So how does software help you accomplish negotiating those benefits? It comes down to onboarding your suppliers effectively and integrating all aspects of your P2P system into your source to contract system. Essentially what you’re doing is setting up variables and parameters to monitor supplier behavior and mitigate risk. By using the tools available in the software solution, it’s easy to keep tabs on suppliers, understand how they’re performing, build up your relationships with them, and ultimately realize better benefits from your contract through monitoring via cloud-based software.
