Boost Savings & Speed With Source-to-Contract

Source-to-contract — which focuses specifically on the activities involved in finding suppliers, gathering bids, and managing contracts — is a subset of the overall procurement process. When a company’s source-to-contract processes are optimized, it creates an effective procurement function.

Procurement, on the other hand, encompasses all activities related to the buying of goods and services for the company. It doesn’t just include sourcing, but also strategic decision-making in managing supplier relationships, optimizing the entire supply chain, driving cost savings, improving invoicing, and meeting environmental, social, and governance (ESG) goals.

You can think of source-to-contract as the strategic upstream of procurement processes. When done right, it creates value downstream for procurement.

Coupa offers four types of sourcing events: RFx events, English reverse auctions, Dutch reverse auctions, and Japanese auctions.

RFx events include a request for information (RFI), a request for quote (RFQ), and a request for proposal (RFP). RFx events are ideal for simple and complex procurement but are most often used for strategic or high-value procurement.

English reverse auctions typically have one buyer and many sellers. Sellers (or suppliers) place bids and force others to drive down their prices. The seller with the lowest bid at the end of the auction is marked as the winner.

Dutch reverse auctions are controlled by the buyer, who sets a low price and continues to increase the price by a set amount until a supplier accepts it. The auction occurs within a specific time interval.

Coupa’s Japanese auctions allow organizations to drive competition by starting the auction at a price higher than the expected buying price and periodically lowering it. With every decrease, suppliers need to accept the new price until only one supplier remains accepting the price.