E-Sourcing is the foremost component of an e-Procurement solution. Sourcing basically refers to the entire process of finding and subsequently shortlisting suppliers for procuring any good or service. Sourcing used to be a tedious process as it involved a lot of research and there used to be a number of constraints in the process. But the adaptation of information technology for procurement has totally changed the scene. Today sourcing activity can be executed over the internet and this has led to an unprecedented increase in the reach of suppliers. A supplier can now easily co-ordinate with buyers and this also increases the number of options that are available to the buyer. Buyer can thus strike a much better deal due to enhanced competitiveness.

E-sourcing can comprise of the basic sourcing process and can also include the e-Auctions that follow the core sourcing process. E-Sourcing platforms can thus vary slightly on the basis of what all modules they include. A well executed e-Sourcing process is in fact pre-requisite for e-Procurement to be successful. Without the right supplier base, even a robust e-Procurement platform would be of no help. Once the e-Sourcing has been done, e-Procurement comes in, and it specifically deals with the transactional part of the purchasing process.

The online sourcing also helps greatly in the creation of a repository of sourcing information that can be of great help later on. With subsequent sourcing processes this repository would grow and would drive the competitiveness upwards, thus benefiting the organization in more ways than one.

A robust e-Sourcing platform ought to have capabilities to enable the buyer to make comparisons among the suppliers and to analyze what they have to offer. Such analysis can be fruitful at times and can give an insight into the prevalent trends and can help make smart choices when shortlisting or choosing suppliers. The significance of sourcing is evident from the fact that a great chunk of total time involved in the purchasing process, approximately 60-70 % of it, goes into sourcing, i.e, researching about and shortlisting suppliers. With e-Sourcing platforms, this time can be cut down significantly thus enabling organizations to conclude their purchasing process in stipulated time frame.