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The Forrester Wave™: Supplier Value Management Platforms, Q3 2024 See Report
What is Sourcing Optimization?
Sourcing professionals use sourcing optimization to evaluate and develop supplier allocation and selection strategies based on a complex set of factors and business rules that often must be considered in the evaluation of strategic sourcing initiatives. To accomplish this evaluation and analysis, sourcing optimization uses mathematical models or algorithms to make the “optimal” sourcing allocation decision, based on meeting all stated constraints and business rules for a given set of data.
Common Challenges with
Complex Strategic Sourcing:
Traditional sourcing analysis is manual and cumbersome. Analysis is mostly done offline, often completed outside of strategic sourcing software in spreadsheets and it can be prone to error. One formula mistake can ruin the entire set of results.
Sourcing analysis can be extremely time-consuming. The first batch of analyses and reports for a complex category sourcing event could take days or weeks to produce. During this time, the team is investing energy and time into tactical activities rather than on strategic initiatives that could create more value for the organization.
Sourcing analysis can be extremely time-consuming. The first batch of analyses and reports for a complex category sourcing event could take days or weeks to produce. During this time, the team is investing energy and time into tactical activities rather than on strategic initiatives that could create more value for the organization.
Because analysis often takes place outside of sourcing solutions in spreadsheets or optimization focused solutions, data is disconnected and disjointed from the sourcing event process. Because of this there’s little to no opportunity for collaboration, knowledge isn’t retained when employees leave the company and its difficult to review and leverage historic results.
Let Ivalua Sourcing Decision Center Streamline ALL of Your Sourcing Processes Across ALL Spend with Sourcing Optimization
Ivalua provides your sourcing teams with an easy-to-use yet powerful optimization sourcing solution to make the best decisions possible. Since Sourcing Decision Center is natively part of the Sourcing Solution and the Source-to-Pay platform, data from across the platform can inform sourcing decisions. And once awards are made, award data can seamlessly be flipped into a new or existing contract with Ivalua’s Contract Management solution. Contact us to let us know how we can help your organization make better sourcing decisions in less time, with less effort.
Sourcing Optimization Benefits to the Business/Organization
Some of the key benefits of Sourcing Optimization include:
Accuracy: With optimization-based scenario analysis, users are assured that their results are accurate.
Transparency: Each scenario clearly displays the data elements and rules considered, and which ones weren’t.
Reduced Sourcing Cycle Time: Analyses that used to take many days to weeks can now be completed in a fraction of that time. In most cases, seconds to minutes.
Results Reflect Business Requirements: Allocation & selection decisions are no longer restricted to just one factor – price. Incumbency, supplier scores for risk, performance, and more can be considered and conveyed through rules, so all stated business requirements are met.
AUTOMATED BID ANALYSIS & OPTIMIZATION
Use rule and scenario libraries or create new rules with ‘natural language’
to simplify your analysis, then scenarios automatically optimize as bids arrive
QUICKLY ANALYZE SCENARIO RESULTS & AWARD
Use sourcing analytics to evaluate optimized results, and quickly award the best option
SEAMLESS CONTRACT CREATION
Automatically flip awards and all relevant sourcing data to a new or
existing contract within Ivalua’s Contract Management solution, with a click of a button
