eSourcing vs. eProcurement: What are the differences?
Sourcing and procurement are often interchangeable terms, and indeed they are related ideas in supply management. However, they’re not quite the same, and neither are eSourcing vs. eProcurement. But what exactly are the differences?
eSourcing vs. eProcurement — Let’s start with their definitions.
What is eSourcing?
Sourcing facilitates the full life cycle of procurement by analyzing how a company spends its money on those assets. eSourcing is simply performing most, if not all, of this procurement process electronically, consolidating proposals, quotes, and bids from various suppliers in one central information hub for ease of comparison.
What is eProcurement?
eProcurement, also known as electronic procurement or supplier exchange, is the purchase and sale of supplies, equipment, works, and services through a web interface or other networked system. The technology is designed to centralize and automate interactions between an organization, customers, and other value chain partners to improve the speed and efficiency of procurement practices. It boasts a suite of innovative features designed to bolster the efficiency, effectiveness, and total cost of procurement.
What are Key Differences Between eSourcing and eProcurement?
eProcurement and eSourcing hold many similarities, but we need to understand what makes them different to understand each one. Here are the critical differences between eProcurement and eSourcing.
Will a comprehensive procurement solution help with procurement and sourcing functions?
It’s hard to ignore that sourcing and procurement need to work in tandem to achieve objectives. For example, the sourcing department generally negotiates contracts with suppliers, including pricing and minimum order quantities. In contrast, the procurement department eventually uses that information to know how much to budget whenever a certain amount of supplies is required. Now, how is the procurement department ever going to do its job perfectly when they don’t have real-time access to sourcing information?
On the other hand, how will the sourcing department determine which suppliers and contracts to renew without any record of supplier performance or supplier risk metrics? It’s simply impossible for your organization to do its work well when there’s no coordination between sourcing and procurement. Put merely, sourcing can’t work without procurement, and procurement will be hindered without data from the sourcing department.
A comprehensive procurement software takes the pain out of both the procurement and sourcing processes. A comprehensive procurement software combines both the procurement and sourcing systems in one that offers:
- A single source of truth for sourcing and procurement
- Digital systems and processes that minimize human error
- An easy way to hand off vendors to procurement, and back to sourcing for reviews, etc.
- Reduce cycle times because decisions get made faster
- Offer greater visibility into your data
Aavenir RFPflow meets all those criteria and more. RFPlow allows anyone to request direct and indirect procurement offers from various vendors and select the best-value vendor regarding skills and budget. With the help of Aavenir RFPflow, your procurement team can easily collaborate with enterprise teams to create a need-focused RFP questionnaire and execute milestone-based supplier response collection processes on ServiceNow.
Looking for a comprehensive procurement and sourcing solution that’s simple to adopt, easy to use, and powerful enough to beat your spreadsheets and forms? Take Aavenir RFPflow for a spin here.
