Sourcing optimization software is a valuable asset for HR professionals. These tools help recruiters find talent in candidate databases and talent pools. Some sourcing tools can also identify passive candidates (those who aren’t currently looking for a new job). This helps companies nurture candidate pools and find the right people when vacancies arise.
Features
The best sourcing optimization software is designed to maximize procurement data. Using the data to identify savings opportunities and enhance supplier relationships allows procurement teams to boost productivity and ensure business continuity with the help of automated decision-making tools. Modern optimization sourcing solutions enable buyers to go far beyond simplistic supplier award decision-making driven solely by a lowest-cost model. Buyers can build advanced sourcing scenarios that incorporate various rules and include or exclude specific suppliers and items based on multiple criteria. This enables buyers to make the best tradeoff between operational efficiency and savings and find a win-win solution. This is especially important for complex categories involving many items and different business rules.
Pricing
Guessing the correct prices for your products is like playing beer pong blindfolded. You may hit something, but you’ll likely miss the cups. And that’s a bad thing for business. Advanced sourcing optimization tools use sophisticated math and powerful computer technology to evaluate supplier bids and find the lowest-cost solutions based on your unique needs. Top providers include a bill of materials (BOM) and routing feature that lets you create complex, layered supply chain networks considering all factors and costs. In addition, top optimization software can automatically relax constraints preventing a solution using heuristics and knowledge-based rules. This frees you to focus on strategic sourcing activities. Some vendors offer this capability as a stand-alone tool; others incorporate it into their comprehensive suite of procurement e-tools.
Integrations
Recruiting optimization software often integrates with other solutions to help automate processes and make data-driven decisions. It allows users to import a wide range of bid information into sourcing events and analyze multiple awarding scenarios based on varying price and non-price factors. Top-sourcing optimization solutions can automatically relax constraints that prevent a solution from using a set of heuristics and knowledge-based rules. They can also incorporate supplier performance, risk, and sustainability into award decisions. Some sourcing optimization tools are popular among hiring teams and copywriters for their ability to clarify biases around age, gender, and disability in their employer brand content.
Support
An excellent sourcing optimization solution supports all parties involved in the procurement process. From SFX tools and real-time data to a built-in feedback loop for ongoing optimization and more, these advanced solutions foster a buyer/supplier relationship that’s mutually beneficial. This enables buyers to accelerate their processes, implement strategic sourcing initiatives, and more, while suppliers can easily participate in bid events at scale. In addition, they can offer non-price bid considerations and receive feedback on their performance to improve quality, competitiveness, and compliance. This ultimately speeds up the award decision-making process and helps ensure optimal results for both sides. The best sourcing optimization software can also evaluate supplier risk and address potential supply chain vulnerabilities before they become problematic.
Reporting
Unlike the eRFP and sourcing tools that rely on email uploads and straightforward feedback, sourcing optimization software can support package bids that collect conditional discounts that often generate savings of 3-12% or more. That alone makes sourcing optimization a cost-effective tool with the highest return on investment of any available procurement SaaS solution. While first-generation sourcing optimization solutions achieved impressive analytical feats, they also required substantial time and effort to set up. Moreover, they have a high barrier to entry due to their complex technology. However, a new generation of sourcing optimization tools is reducing the barriers to adoption by simplifying the process and leveraging technology to deliver better results in less time. They provide the ability to make supplier award decisions based on total value, not just the lowest price, and they do it across spend categories.