FAQs about e-sourcing

 It is the use of technology in a strategic sourcing process so that buyers can reduce cost, manage supplier risks and hike profitability.

 How it is different from a traditional buying process?

 First, e-sourcing is a more strategic purchasing process. A buyer deals with a number of new suppliers and has to decide on their credibility before awarding the contract. Similarly, he has to decide on new cost or pricing structures.

 Second, it involves the use of technology. In a normal buying process the negotiations take place face to face, but in e-sourcing one uses technology in the entire process, from sending requests for quotations (RFQs), requests for information (RFIs) to the final online auction.

 Third, the buyer typically tries to manage risks by taking more external factors into account than in a normal buying process.

 How is e-sourcing different from e-procurement?

 E-procurement is more transactional and deals primarily with the processing part of purchasing