Discuss trends and ideas on the convergence of Infrastructure Technology Outsourcing (ITO) and Business Process Outsourcing (BPO). Find out how you can benefit from adopting a managed services delivery model, and learn more about how the bundling of consulting, technology and BPO services can transform your organization.

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eAuction is just one aspect of eSourcing strategy

eAuctions erupted into sourcing scene with lots of hype later failed to live up to the high expectations, and organizations slowly realized that other modes of negotiations are equally essential as well to sustain healthy supply relationships and cost competitiveness. In many instances we have seen that the over usage of eAuctions ended into fiasco primarily due to lack of supplier acceptance and inability to cut down the cost beyond certain level. This has resulted into many organizations eschewing their eAcution tool and relook at traditional negotiation strategy like RFx, Cost model, Face-to-Face negotiations as well to drive viable & sustainable cost savings, which became important during these tough years when we saw a string of supplier bankruptcies resulting in immense supply chain risk. Having said that organizations in early stages of eAuction adoption curve, for instance in Asia region where eAuction penetration had been low due to cultural reasons, continue to reap initial success and saving benefits. Most of the eSoucing tools available in the market are pretty matured with stable functionality and differentiate very little in terms of attributes.

While evaluating eSourcing tool organization needs to consider two very important factors as well – one: Ease of use, two: Customer and training support. It is vital to keep following in mind while choosing eSourcing tool:
1.      Focus on business aspect than technology superiority: It is important to consider ‘ease of use’ and this need to be from the perspective of internal users as well as external users to accommodate change management on the supplier side also.
2.      Look for business value of feature than just availability: It’s a known fact that organizations typically use only a fraction of functionality available in any package. So the evaluation of solution should be based on business value the feature would actually be providing rather than just availability and complexity.
3.      Effective Customer Support: It is absolutely essential to have support from your eSourcing tool vendor in terms of high responsiveness and resolution of customer queries. This is a key to successfully conduct sourcing event and achieve the end objective.

Fortunately now organizations also has option of managed services for Sourcing which focuses on realized savings as an outcome rather than underlying eSourcing technology and is fast emerging as a generally accepted service model. It is typically on a gain share pricing model – a trend maturing fast in this space.

Posted by Gurjeet on October 19, 2009 5:13 AM |

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