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Source to contract

Source-to-contract, i.e. the focus on the origin of contracts, considers the totality of all procurement processes for products and services. The process begins with the needs analysis, continues with the elaboration of the procurement strategy and extends through the request for quotation and contract negotiation to the awarding of the order to the most suitable supplier.

Optimization of supplier contracts with source-to-contract

Source-to-contract optimizes the procurement process from the first evaluation to contract lifecycle management. It can be used to achieve savings and compliance. Procurement organizations are constantly looking for the best supplier, negotiating and then managing the concluded contracts. The common office tools have been used for this for many years, although buyers often reached their limits in their daily business. The general lack of innovation especially for business purposes, the limited cooperation between buyers and sellers, the lack of knowledge transfer in the company and the inadequate traceability of deliveries were noted. These are the typical challenges that large procurement departments usually face in strategic and operational business. In the meantime, dedicated web solutions help purchasing managers to fully manage a source-to-contract cycle. This leads to high savings while working faster and more efficiently. The procurement activities also become more visible when there is a higher level of contract conformity.

Advantages of inorder's source-to-contract solutions

  • 15 - 20% time savings with offers
  • higher competition between suppliers
  • better visibility and contract compliance
  • significant savings
  • optimized negotiation results

Source-to-contract in practice

With source-to-contract, local and global procurement strategies can be worked out. Template-based quotes are created in a flash to collect comparable and accurate bids from suppliers. The answers from suppliers can be analyzed: The purchasing manager then makes his decision on the basis of sophisticated allocation scenarios. An online auction for transparent negotiations is also possible. Contracts can be drawn up collaboratively and services can be tracked over time.

Why is source-to-contract so important?

If buyers do not know which products they are purchasing from which supplier and to what extent, they cannot control their spending. This was noted years ago by Shell CEO Dominique Gardy. In the meantime, it is considered standard for purchasing organisations to use professional IT solutions. The current development has a lead-in since the 1980s. At that time, the processes were not yet processed online, but IT was already finding its way into the companies. The first ERP solutions with the aim of better controlling costs were established from the former inventory management. However, this was only moderately successful over the decades: often the purchasing departments were only able to influence around 20% of all expenses. The reason was the still widespread maverick buying ("wild purchasing") of their departments. The processes were also not automated enough or not at all. In the meantime, there are strategic and operational procurement cycles (so-called double cycle), which, however, should function software-supported and web-based at the same time. This is still a problem in many companies. Source-to-contract from inorder now provides an adequate solution for this.

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