Your business has identified a need for a product or service. How do you find what you’re looking for? In a world that is increasingly online and fast-paced, it is critical that your organization finds a solution to its needs quickly and effectively. Procurement continues to be a critical part of your supply and value chain, and identifying the right supplier is crucial to avoiding unnecessary spend and generating value. In a digitally transformed organization, the optimal way to do this is by establishing a strong source-to-contract process. To help you out, we have put together a guide on the system and process, to show you exactly how it can assist your organization.
What Is Source-To-Contract?
Source-to-contract is the set of processes and systems that govern the procedure of sourcing new materials or services. This begins from the point of identifying a need, and runs through to the contracting process – which can be handled with a contract life cycle management solution. This process forms a critical part of the contract life cycle, and as it is a more granular aspect of the process, it can often be overlooked, both in implementation and importance.
Sourcing products is becoming more challenging and more critical than it has ever been, due to the rising popularity and use of systems that allow individual teams to place requisition orders without going through a central procurement body. As these orders are then processed automatically according to preset processes, the ability to approve suppliers quickly and guide them to the contract stage is essential in helping your employees to maintain efficiency.
How Does Source-To-Contract Work?
Source-to-contract relies on digital and cloud based processes to record each step of the requisitioning, sourcing, vetting, negotiation, and contracting cycle. These steps are individually time-intensive, and rely on the recording of data and documentation at every touch-point. Migrating this process online can drastically speed up decision making, as each relevant party will have instant access to all available information. This provides you with greater visibility over your suppliers as a whole, and can assist your procurement team to qualify and select suppliers accordingly.
A source-to-contract solution can benefit your business in a number of ways – such as increase transparency, improve efficiency, reduce costs, and better supplier relationships, to name a few – but can also help you to decide whether to renew or terminate contracts when they come to the end of their lifecycle. This is an enormous benefit when you’re attempting to grow your business, as any information that will assist you in evaluating and analyzing your spend can help your business thrive.
Where do you begin when establishing a source-to-contract process or solution? As an expert in supply chain and procurement, SCP can guide you along the journey of building the source-to-contract process and implementing the right solution that best fits your business. With our deep industry knowledge and expertise, you can rest easy knowing that SCP will get the best out of your processes and systems.