The pros and cons of outsourcing supplier discovery

Finding and working with the best suppliers for your business can be daunting and time-consuming. You must search for potential suppliers, contact them, request quotes, compare offers, verify credentials, etc. To top things off, you have to do all this while dealing with the risks and challenges of the global markets. That’s why many businesses choose outsourcing supplier discovery to a third-party service or platform.

But is this the best option for your business? In this article, we explore the pros and cons of outsourcing supplier discovery and why, with current technology, you don’t have to outsource anymore.

The challenges of supplier discovery

Supplier discovery is a labyrinthine journey that demands patience, diligence, and strategic acumen. Despite the digital age’s advancements, the process remains arduous. According to David Post, managing director at IBM Blockchain Ventures, it takes approximately three months to complete a single supplier search—a timeline that underscores the intricacies involved.

Sourcing professionals invest over 40 hours of painstaking work during this quest, meticulously evaluating potential partners. Yet, paradoxically, they can only consider a mere few dozen suppliers out of the vast pool available.

Benefits of outsourcing supplier discovery

Outsourcing supplier discovery can help solve some of these issues by offering many benefits for your business, such as:

• Saving time: Outsourcing supplier discovery can free up your time and resources, allowing you to focus on your core competencies and strategic goals. You can avoid spending days searching for suppliers, contacting them, requesting quotes, comparing offers, and verifying credentials.
• Reducing costs: Outsourcing can help you reduce your operational costs, such as travel expenses, staff salaries, overheads, and fees. You can also leverage the outsourcing service or platform's economies of scale and bargaining power.
• Accessing global markets: Long-standing supplier discovery platforms can help you access a broader and more diverse pool of suppliers from different countries and regions, giving you more options and opportunities to find the best fit for your business.

• Mitigating supply chain risks: Finally, outsourcing supplier discovery can help you mitigate the risks associated with finding and working with new suppliers, such as delays, defects, disputes, fraud, or legal issues.

Challenges of outsourcing supplier discovery

Despite its many benefits, outsourcing supplier discovery can also pose challenges for your business, such as:

• Finding reliable and trustworthy suppliers: Outsourcing supplier discovery can make it harder for you to establish trust and rapport with new suppliers early on, as you may need direct contact or interaction with them. You may also have to rely on the reputation and credibility of the outsourcing service or platform and trust that they have done their due diligence and background checks on the suppliers.
• Negotiating contracts: Negotiating contracts with suppliers can also become more cumbersome when outsourcing supplier discovery, as you may have to deal with multiple parties, intermediaries, or agents.
• Data security and privacy: Outsourcing supplier discovery involves sharing sensitive information with third parties. Protecting personally identifiable information (PII), trade secrets, intellectual property, and financial data becomes essential. Also, ensuring that supplier data remains secure during the discovery process is vital. Due to poor security practices, unauthorized access, leakage, or wrongful deletion can lead to data breaches.

• Ensuring sustainability: Outsourcing may reduce visibility and control over your new suppliers’ operations, practices, and impacts, bringing challenges when dealing with environmental, social, and governance (ESG) issues.
• Dependency risk: While outsourcing provides cost savings and helps lower supply chain risk, it also creates a dependency on external parties. Reliance on outsourcing can erode internal capabilities and strategic options.

BabelusAI: Your Supplier Discovery Ally

It’s clear why, for many businesses, outsourcing supplier discovery may be the preferable choice. Supplier discovery is complex; many businesses sacrifice data privacy, security, internal capabilities, and more to avoid it. But it doesn’t have to be this way.

Businesses need a cost-effective solution that makes supplier discovery easier, not one that does it for them. The answer lies in technology and automation. Platforms like BabelusAI empower you to find the best suppliers in record time, even within your current supplier network, without outsourcing the process to someone else.

Supplier data purification

The new and improved Insight360 is BabelusAI’s answer to bad supplier data. It uses an advanced, custom-trained artificial intelligence model to analyze all publicly available data on the suppliers in your database, creating a summary and description of each supplier and a comprehensive list of all the products and services they offer. The result is a clean, enriched, error-free, and up-to-date supplier database.

Smart search for supplier discovery

BabelusAI makes finding suppliers easy. The powerful search engine enhanced by GenAI can understand queries and find what you’re looking for. Our AI model converts public data into insights without the need for conversational chats. Combined with Insight360, the smart search is a supplier discovery powerhouse, allowing you to find hidden gems within your own supplier network.

In the intricate dance of supplier discovery, BabelusAI leads, keeping your business agile, secure, and competitive. If you want to stop sacrificing internal capabilities and enhance them through smart automation, contact us today or schedule a call to discuss developing a pilot for your company at no cost.

Remember, the path to supplier excellence lies in informed choices. Choose wisely, and let technology be your compass.