Enabling Strategic Sourcing Through Source-To-Pay Software

Strategic Sourcing Strategy

The power of modern software presents valuable tool for corporations and their C-suite members to drive their business forward. In particular, source-to-pay (S2P) software has been shown to provide the enterprise with numerous advantages, most prominently in the field of strategic sourcing. Strategic sourcing is the process of optimizing suppliers, materials, and services across the supply chain, while also endeavoring to identify cost efficiencies.

In recent years, S2P software has become the go-to solution for organizations embarking on strategic sourcing initiative. To be successful in this endeavor, it is essential for the enterprise to leverage the power of technology solutions. After all, S2P solutions enable the organization to gain transparency and insights, as well as to streamline and automate buying processes. As result, companies can more intelligently manage the supplier base and reduce maverick buying, while increasing working capital and reducing risk.

Adopting and adapting to S2P strategy can seem daunting, but with the correct approach, any executive with the appropriate backing and internal support can implement clear and effective sourcing and procurement plan. The following step-by-step guide offers comprehensive introduction on how to get started using S2P software to support strategic sourcing strategy.

Step 1: Begin with an Evaluation

The first step in the process is to carry out comprehensive, in-depth evaluation of current spend and supplier analysis. This data should include breakdown of the goods and services purchased from the suppliers, as well as an inventory of the goods and services used, which ones are regularly purchased, which rarely, and what directions the business requires for the future. An evaluation should also include review of the internal rules and regulations, existing contracts, and supplier relationships, in order to ascertain where the companies strengths and weaknesses are and to provide clear view of the competitive landscape.

Step 2: Establish Goals and Objectives

When it comes to strategic sourcing, setting clear goals and objectives is essential. As such, the next step is to use the data gathered during the evaluation phase to create blueprint of the organizations desired future state utilized during the proposed strategic sourcing initiative.

Step 3: Prepare Supplier Contact Requests

Once organizational goals and objectives have been established, the next step is to prepare requests to quantify the negotiation capabilities of each supplier. This process should be organized around distinct lines of business to help focus vendor/supplier negotiation efforts. Additionally, it ishould be fully in line with company procedures and processes.

Step 4: Finalize Negotiations and Update Your S2P Platform

Once negotiations have been finalized, the S2P program will need to be updated. Source-to-pay software automates the order and payment process, so the supplier’s details should now be coded into the system. This will help ensure that invoices are properly managed and accounted for to ensure the smooth running of the organizations finances.

Step 5: Implement Purchasing and Measure Results

The final step is to implement purchasing and payment process that is supported by the S2P solution. This should include measures such as contracts and formal agreement documents to keep everything in line with the organizations goals and objectives. The S2P platform can then be used to run regular reports to measure the success of the new purchasing process and gain insights into how it is currently performing.


Modern S2P software is powerful way to support the organizations strategic sourcing strategy. By following the aforementioned five-step guide, any executive can effectively utilize the tools available to them to maximize the effectiveness of the companies supplier/vendor negotiation process, as well as minimize costs and reduce risk across the entire purchasing operation.