What is Sourcing?

Sourcing is the process of finding, evaluating, and selecting the right suppliers to meet a business need at the best combination of price, performance, and risk. In procurement, sourcing often includes running structured supplier evaluations such as RFPs (Request for Proposal) or RFQs (Request for Quote). 

Sourcing can range from a quick competitive bid to a more formal, structured evaluation. When sourcing follows a repeatable, data-driven framework focused on long-term value and risk management, it is often referred to as strategic sourcing. Strategic sourcing adds deeper analysis, market insight, and planning, but both approaches share the same core goal: making better supplier decisions.

Key Components of Sourcing

Most sourcing processes follow a common set of steps, regardless of category, spend size, or sourcing complexity. These steps create consistency, improve transparency, and make it easier to compare suppliers objectively.

Key components of sourcing include:

  • Requirements definition: Aligning on scope, business needs, and success criteria.

  • Supplier selection: Identifying which vendors to invite (incumbents + alternatives).

  • Sourcing event execution: Sending an RFQ/RFP and collecting structured responses.

  • Supplier collaboration: Managing questions, clarifications, and revisions.

  • Evaluation and comparison: Reviewing pricing, capabilities, and tradeoffs.

  • Final selection: Choosing the best-fit supplier and moving toward contracting and onboarding.

Benefits of Sourcing

A strong sourcing process helps procurement teams move beyond ad hoc purchasing and toward more consistent, defensible decisions. By standardizing how suppliers are evaluated, sourcing improves outcomes across cost, risk, and speed.

Effective sourcing helps organizations:

  • Improve supplier selection by comparing options more objectively

  • Increase savings through competitive pricing and better negotiation leverage

  • Reduce risk by standardizing compliance and requirements

  • Move faster by streamlining supplier collaboration and decision-making

  • Scale procurement impact by enabling more categories to be sourced efficiently

The Levelpath Difference

Levelpath approaches sourcing with an AI-native approach that enables teams to run more events without increasing workload. Instead of relying on manual documents, email threads, and spreadsheets, Levelpath centralizes sourcing in a single system designed for speed, governance, and scale.

AI plays a core role in how sourcing works in Levelpath. By reducing manual effort and normalizing supplier input, AI helps teams run more sourcing events, involve more stakeholders, and make higher-quality decisions without increasing operational burden.

With Levelpath, sourcing is designed to be:

  • A system of record.
    All sourcing events, supplier responses, and evaluation data live in one centralized workspace. This eliminates scattered inboxes and ensures sourcing history is accessible, auditable, and reusable.

  • Faster to launch and easier to repeat.
    AI helps accelerate sourcing event creation by reusing existing requirements, templates, and prior sourcing data. Teams can launch RFQs and RFPs faster without starting from scratch.

  • Easier to evaluate at scale.
    Supplier responses are often long, inconsistent, and difficult to compare. Levelpath uses AI to summarize, normalize, and structure responses so stakeholders can review bids side by side and focus on tradeoffs, not formatting.

  • Designed to be flexible.
    Levelpath supports everything from lightweight competitive bids to highly structured RFP-style sourcing. Teams can apply the right level of rigor based on spend, risk, and strategic importance.

  • Built for collaboration without chaos.
    Internal stakeholders and suppliers collaborate directly within the sourcing workflow. Questions, clarifications, and revisions stay connected to the event, improving transparency and reducing rework.

  • Governed by design.
    Built-in controls, including click-through terms acceptance and standardized workflows, help enforce policy, reduce risk, and create a more consistent supplier experience.

By embedding AI directly into sourcing workflows, Levelpath enables procurement teams to move faster, source categories they are not familiar with, and elevate sourcing from a tactical task to a strategic capability.

Discover how Levelpath can transform your procurement processes and elevate your organization. Request a demo or join one of our monthly sessions to learn more.