What is Strategic Sourcing?

Strategic sourcing is a process that creates efficiencies across all spend categories, minimizes supply risks with improved supplier selection, and gives visibility into pricing and forecasting.

The four steps of strategic sourcing

Strategic sourcing is a procurement process that connects data collection, spend analysis, market research, negotiation, and contracting. It stops short of the actual purchase of and payment for goods and services.

Strategic sourcing can be customized to meet a customer’s specific needs, but its main goal is to leverage a single, integrated system to enhance profitability.

Strategic sourcing best practices include: digitizing documents, participating in a digital business network, and automating workflows. The process can be broken down into four steps:

  1. Data collection and spend analysis: Spend analysis concentrates supplier data into one source, letting organizations know exactly what’s being spent where and presenting the opportunity to streamline vendors.

  2. Supplier discovery and RFx: Sourcing becomes a strategic advantage when organizations can access supplier data through a digital business network, allowing them to request RFPs and have suppliers compete for their business.

  3. Negotiations and contracting: Automated tools can speed workflows, simplify the digital signature process, and create an electronic repository of contracts where organizations can set renewal alerts. 

  4. Implementation and optimization: When sourcing is automated and digitized, organizations can move faster, build in feedback loops for continual optimization, and constantly evaluate suppliers to make sure they're getting the best sourcing agreements possible.

Strategic sourcing software paired with a digital business network increases efficiencies, minimizes supply risks, and achieves cost savings.

Image used on ariba.com page about strategic sourcing
Image used on ariba.com page about strategic sourcing

Digitalized strategic sourcing makes buying easier

Manually managing sourcing with spreadsheets can open gaps in the process, leading to a high risk for error and reduced visibility.

Digitalization through a single platform minimizes risk, creates cost savings, streamlines processes, and gives all stakeholders the improved visibility needed to ensure suppliers meet quality, compliance, and cost expectations.

Create a seamless strategic sourcing experience from start to finish

Automated and digitized sourcing helps select the right suppliers and negotiate the best deals, faster.

Aggregate and classify every purchase

Standardize source-to-contract processes

Free people up for even more strategic work

Identify new savings opportunities

Drive materials cost savings and optimization across all spend categories

Increase speed and drive up throughput across teams

Find better suppliers and innovation partners

Easily connect buyers and suppliers to make complex processes easier

SAP Ariba Solutions for Strategic Sourcing

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Strategic Sourcing

Discover qualified suppliers, speed up your sourcing cycles, and create the most competitive, best-value agreements for sustainable savings with all your sourcing needs.

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SAP Ariba Spend Analysis

Organize all spend data from across different systems and identify and prioritize sourcing opportunities more easily.

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SAP Ariba Discovery for buyers

A free buyer-supplier matching service, putting a world of high-quality suppliers at your fingertips to drive bids for your business up, and your costs down.

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