Source-to-contract, or focusing on the source of contracts, evaluates the entirety of all product and service procurement stages. The method involves a needs assessment, proceeds with the development of a procurement strategy, and concludes with the distribution of the order to the best suitable supplier after the demand for bid and contract settlement.
S2C Technology enables your procurement staff to become more responsive, increases visibility, and ensures business operations.
Why is source-to-contract so important?
Buyers can’t control their expenditures if they don’t know which things they’re buying from which suppliers and in what quantities. Shell CEO Dominique Gardy pointed this out years ago. Meanwhile, professional IT services are regarded as typical for purchasing firms. Since the 1980s, there has been a build-up to the ongoing development.
The operations were not yet conducted online at the time, but IT was already making its way into businesses. From the prior inventory management came the initial ERP options with the goal of greater controlling costs. Over the decades, this was only somewhat effective: buying departments were usually only able to impact roughly 20% of all spending.
The cause for this was their sectors continued revolutionary shopping. The operations were also insufficiently or completely automated. Meanwhile, there are operational and strategic procurement phases (sometimes known as the “double-cycle”), which should both be software-supported and web-based.
It’s still an issue in several businesses. For all of this, source to contract is currently an appropriate solution.
Detail insight of Source to contract process
Source to contract is a procedure that begins with locating, bargaining with, and dealing with a products provider and ends with ultimate payment for those items.
To increase procurement efficiency, it uses innovation, big data, and online platforms. Firms aggregate purchases across business units to increase productivity, provide superior spend insight, and produce business benefits, rather than treating procurement as a series of isolated chores. Those that use a source-to-contract platform will be able to:
- Improved procurement insight leads to larger sourcing savings.
- To reach signed contracts sooner, combine critical processes onto a single platform.
- Compliance with procedures, regulations, and contracts is improved.
- Enhance trading partner cooperation, credibility, and spending.
- Improve your pricing and forecasting accuracy by negotiating better terms.
Before we go into those details, it’s important to note that each procurement strategy will naturally differ. This is due to the fact that every company’s procurement and sourcing requirements are subtly different. As a result, organizations develop specific procurement methods that may or may not be related to the procurement strategies of other organizations.
When you consider this, it’s clear why organizations should devote time and budget to the procurement unit and procurement-related operations. The investment is definitely worth the payback because it is one of the essential foundations of any firm.
Advantages of source-to-contract solutions:
Here are some of the advantages:
- 15 to 20% time savings with proposals;
- increased supplier competitiveness;
- greater visibility and agreement fulfillment;
- major cost savings;
- optimized negotiation outcomes