What does this module / this process contain:
Request for Information (RFI): Assessing a supplier's suitability by asking questions that the supplier must answer. These are mostly questions related to financial stability, compliance, code of conduct, etc. The RFI can be set up with target requirements and the response formats for the supplier can range from free text, yes/no, multiple choice and more. The RFI process is usually carried out with a very large number of suppliers in order to be able to determine which supplier is suitable. The RFI process is used above all when you are buying in a new category in which you do not (yet) know the suppliers.
Request for Quotation (RFQ): Suppliers that meet your criteria in the RFI can be invited to submit a bid. The buyer creates forms in which he asks for the prices of products or services that the supplier can provide. You can also perform a Request for Proposal (RFP) if these two steps are combined into one, i.e. the supplier answers both questions and a price. In the past, procurement teams had to email these questions and templates, the suppliers reported back the information as Microsoft Word or Excel, and purchasing had to analyze the answers. With eSourcing, the process is streamlined as suppliers sign up and upload their responses to the eSourcing software. The supplier-buyer communication during the RFQ process is performed and logged within the eSourcing platform.
Quote comparison: After the requested evaluation formats have been sent and received, an evaluation process takes place in which the buyers compare and evaluate the offers. In the evaluation step you will see the biggest savings in terms of efficiency. This process used to involve manually sorting stacks of papers delivered by suppliers invited to bid. Comparing apples to apples was almost impossible as all providers used different response formats.
eAuction: Auctions are designed to encourage potential suppliers to compete with each other to deliver the best possible deal for procurement professionals. Simply put, using the eAuction allows the buyer to negotiate the price with more suppliers than a manual process, where buyers are shortlisted from a long list of suppliers because they don't have the capacity to negotiate with more than one or two lead suppliers, and at best a handful. While eSourcing only supports the process of obtaining information and not the negotiation itself, the auction via the various auction designs such as "best price sealed bid", "Dutch ranked" or "English ticker" also includes a negotiation strategy that generates high additional savings.
Sourcing optimization: Sourcing optimization enables sourcing teams to go beyond simple supplier selection decision making driven solely by a lowest-cost model. Buyers can collect a wide range of price and non-price bid information from suppliers and then analyze multiple award scenarios based on these criteria and other constraints/rules. Both buyers and suppliers can define any number of rules (e.g. "I give product A a 3% discount, product B a 5% discount, but if the customer buys both products, I give a 6% discount on my entire portfolio") that the tool analyzes using its own algorithm and delivers the best combination of all factors as the result. Sourcing optimization is often used in logistics, where many routes are requested from many transport companies, but each provider only bids on a subset of the routes. The tool then selects the best combination of suppliers for all routes.
Contingent workforce management is the hiring and management of non-permanent employees. This includes independent contractors, gig workers, those engaged under a Statement of Work (SoW), agency contract labour and temporary staff. As the battle for talented knowledge workers ratchets up, developing a cohesive contingent workforce strategy supporting total workforce management will help ensure your organization is leveraging proven best practices to access talent, drive savings and efficiencies, and mitigate risk. In general, this can be used for blue-collar workers as well as laborers in the fields of art and design, computing and information technology, and media and communications – as they are professional knowledge workers who work independently by choice. While these knowledge workers offer unique skillsets that are valuable to organizations, they also come with an increased risk of exposure to tax, misclassification, and labor laws. Contingent workforce management tools help manage onboarding, compliance, risk, diversity, and development requirements.
What are the main goals:
- Reduction of process costs by streamlining the entire process based on standards and the inclusion of sub-processes such as the automatic transmission of documents (such as 3D drawings for engineered parts) and the automatic updating of ERP systems based on the submitted offers.
- Analysis of the cost drivers using templates (so-called cost break-downs) in order to be able to identify the right negotiation strategy.
- Simple comparison of offers with simultaneous standardization of request and offer templates so that the comparability of products and services can be achieved.
- Guaranteed implementation of the category and supplier strategy. The prerequisite for this is that category management and the resulting results are integrated.
- Automated negotiations based on fixed rules to achieve maximum commitment and price reduction, as is the case with auction tools.
- Material cost reduction by simply including additional suppliers and the resulting increased competition, analyzing the right negotiation strategy as demonstrated by cherry picking and considering all relevant data such as risk, supplier performance, quality indicators and other factors.
Specifics per industry:
Manufacturing usually asks not only the price of a product but also price components. This can be done very simply on an aggregated level, by only distinguishing between process costs, material costs, packaging costs and transport costs, but this can also be done in much more detail, up to the analysis of all cost components in production.
If you also compare the material costs with indices, there are additional requirements for a sourcing tool that not every tool can do.
Another requirement in the production environment is the TCO comparison of offers, where not only the part prices but also development costs, quality costs and other costs have to be included proportionately.
The automatic and highly secure transmission of very large documents (such as 3D drawings) in the course of inquiries is also a special feature in the production environment.
Automotive is still a special case within manufacturing because in the automotive environment offers are often requested for the next 8 years (the usual term of a model generation) and suppliers here also have to calculate ratios, i.e. performance improvements over the term, which are included in the prices and calculated automatically.
Banking and insurance companies and other sectors purchase a particularly large number of marketing services. These industries have a greater need for contingent workforce management than other industries.
Transportation also has special requirements, as sourcing processes here often involve more than 1,000 line items and several hundred suppliers, which not every tool can cover without performance problems.
Latest innovations:
TVO calculation taking into account really all relevant factors in the special product group. This means that several factors are automatically added to the price offered by the supplier and the price is re-evaluated. It includes information on supplier performance, risk, suitability, innovative strength, etc.
Negotiation bot is a tool that can be used to carry out a fully automated negotiation. We distinguish between a hagglebot that simply simulates a buyer and tries to negotiate additional conditions such as a discount, and negotiation bots that conduct price negotiations on the basis of defined algorithms, such as game theory has developed over the past decades. These bots are primarily used for the so-called tail spend (these are products or services with a lower value where the manual negotiation effort is not worthwhile because the process costs are higher than the expected savings). Well-known providers are Pactum and nnamu (part of Beroe since March 2025).
Advisors for conducting the most effective negotiation. Today, there are advisors like carry-over advisor, sourcing-approach advisor, cost-control advisor, contract advisor and many others. The advantage of these advisors is that they react quickly to changing market situations, that all buyers can rely on the same know-how and that all available information is used for decision-making. This is becoming more and more important as more and more information has to be included in an award decision, especially in a volatile environment.
Autonomous procurement: this is what tools are called which include both the identification of the right negotiation strategy and the independent implementation of this strategy, with the aim of achieving the greatest possible savings in costs.
AI sourcing agents are the latest step: since 2025, a new generation of startups such as Didero, Lio or Zalion offers agents that write RFQs, contact suppliers by email, compare the quotes and prepare or even conduct the negotiation. The buyer approves the result instead of doing every step.
No-UI concepts go in the opposite direction, in which the supplier can respond to an offer in an unstructured manner in an email and the software can read out the correct content with AI techniques. This is particularly relevant in industries that have suppliers who are not very IT savvy.
Extensions and additional functions:
Sourcing optimization (which is also called expressive bidding) is an extension in the sourcing area that only applies to certain industries or product groups. Only a handful of specialised tools offer it, for example Keelvar and Archlet; some suites have it built in.
eAuction was very popular around the year 2000, however it was used less in the following years as many companies put a negative strain on their supplier base by conducting auctions which ended up being renegotiated again. The suppliers have learned that they are not allowed to give the best price because they can negotiate again later anyway. Today, auctions are only used with 100% commitment, which means that the winner of an auction also gets the contract without renegotiation. In the eCommerce business, millions of auctions run fully automatically in the background, since every advertisement is displayed according to this pattern.