Sourcing and Procurement Operations integration with third-party sourcing solutions

  • Release version: Xanadu
  • Updated August 1, 2024
  • 4 minutes to read
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    Summary of Sourcing and Procurement Operations integration with third-party sourcing solutions

    ServiceNow’s Sourcing and Procurement Operations supports integration with third-party sourcing solutions to automate and streamline the sourcing process. This integration is enabled through a generic, configurable sourcing integration framework within the Source-to-Pay Integration Framework. It allows customers to define business criteria that trigger integrations, and supports multiple third-party sourcing tools either by building custom connectors or using pre-built applications available in the ServiceNow Store, such as the certified Fairmarkit connector.

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    Integration Process

    When integration criteria are met and a shopper initiates a pricing request in Shopping Hub, sourcing requests are grouped into a negotiation event within the Sourcing and Purchasing Automation application. After setup, these negotiations are tracked and managed through outbound queue tables (Sourcing Outbound Queue, Sourcing Line Outbound Queue, Negotiation Event Outbound Queue) which interface with the third-party platform to initiate RFx events.

    The third-party tool responsible for processing each request is identified and recorded, and supplier response deadlines are managed via a configurable system property (default of three days). ServiceNow can automatically close bids based on this deadline or allow manual closing by the sourcing manager. Changes to deadlines or cancellations are synchronized back to the outbound queue tables to keep systems aligned.

    If errors occur during data transfer, the integration status updates to “Failed” and the sourcing request enters a “Pending Resubmission” state, requiring manual intervention and resubmission by the procurement specialist.

    Suppliers participate in bids through the third-party platform, and returned quotes populate ServiceNow’s Sourcing Bid Stage and purchase lines via transform maps. Notifications about RFx creation, awarding, and bid rejections are sent to shoppers and sourcing managers through Shopping Hub and Source-to-Pay Workspace.

    Awarding suppliers can be performed either in ServiceNow or the third-party tool, with results synchronized between systems via the Awarded Supplier Outbound Queue table. Additional supplier or product records are created automatically if new bids are received.

    Decision Configuration

    The Sourcing Event Generation Rule decision table lets sourcing managers and procurement teams define flexible business criteria that determine which sourcing requests trigger integration with third-party tools, enabling tailored automation based on organizational needs.

    Integration Tables

    Key integration tables hold the staged data required for Request for anything (RFx) processes and facilitate API communication between ServiceNow and third-party sourcing applications. These tables are central to managing the lifecycle of sourcing requests, negotiations, bids, and awards across both platforms.

    Practical Benefits for ServiceNow Customers

    • Automate and centralize sourcing activities across ServiceNow and third-party platforms, improving efficiency and accuracy.
    • Maintain visibility and control over sourcing events, deadlines, and supplier interactions within ServiceNow.
    • Customize integration triggers to align with specific business rules and procurement workflows.
    • Leverage existing certified connectors or build custom integrations to extend sourcing capabilities.
    • Receive real-time notifications and updates on sourcing status to support timely decision-making and supplier selection.
    • Handle errors and exceptions systematically with clear resubmission processes to ensure data integrity.

    ServiceNow can integrate with third-party sourcing solutions to automate the sourcing process within the Sourcing and Procurement Operations product. A generic, easily configurable sourcing integration framework is provided within Source-to-Pay Integration Framework to enable you to specify the business criteria for triggering an integration. This integration framework can also integrate with multiple third-party sourcing solutions based on different criteria.

    Customers can either build the connector to that third-party tool or find one in the ServiceNow store.

    For example, Fairmarkit, a third-party solution, built and certified its own ServiceNow application to the store, which leverages the integration framework to connect with the Fairmarkit system. For more information on this integration, visit store.

    For information on decision configuration, see Decision configuration for third-party sourcing.

    To learn about the integration tables, see Integration tables for third-party sourcing.

    Third-party sourcing integration process

    • If an integration is triggered, considering that applicable business criteria are defined in the decision table, and a request for pricing initiated by a shopper in Shopping Hub meets the criteria, one or more sourcing requests within a single purchase are automatically grouped into a single negotiation event. These are systematically created in the Sourcing and Purchasing Automation application.
    • When the negotiation setup playbook is complete, and the negotiation event is in the Work in Progress state, with the associated negotiations, sourcing requests, purchase lines, cases, and tasks in the Negotiation in Progress state, relevant data is populated in the Sourcing Outbound Queue, Sourcing Line Outbound Queue, and Negotiation Event Outbound Queue tables. This data can then be processed by the third-party solution accordingly, to initiate an RFx in their platform. Negotiation event is also created for the integrated sourcing request.
      Note:
      After a sourcing request is created and posted to the Sourcing Outbound Queue table, the third-party tool that is responsible for processing that sourcing request is identified and stored in the Third party tool name field.
    • A system property for the supplier responses close date (sn_spend_intg.u_bids.end.date) sets the Supplier responses close field value on the negotiation event and sourcing requests to after the negotiation event has been created, plus the number of days defined. The default value is three days. The sourcing manager can override this value manually when updating this field on the negotiation event record.
      Note:
      A schedule job can be set up in the ServiceNow instance to check if the supplier responses close date has been reached (aka today). When done, ServiceNow stops receiving bids from suppliers and moves all individual supplier negotiations within the negotiation event to the Pricing Obtained state, and then to Requires Decision. The sourcing manager or fulfiller can then award a supplier with the business. The timestamp of the supplier responses close date is 23:59:59 of the day the bids close, in UTC date/time format. As the sourcing manager, you can also decide to close the bids now, with the date and timestamp of now, and proceed with the awarding flow without any wait time.
    • If the supplier responses close date changes on the sourcing request, then this update is sent to the Sourcing Outbound Queue table. The Supplier responses close field is updated. Also, if a sourcing request or purchase line is canceled, this status is also sent back to the sourcing request or purchase line outbound tables respectively.
      Note:
      The supplier responses close date is read-only on the sourcing request, but any change of the supplier responses close date on the negotiation event rolls up to the sourcing requests.
    • If there’s an error inserting new or updated records to this table, then the integration status is updated to Failed. The sourcing request at this point is in the Pending Resubmission state. The error details are captured in the Processing Message field and the integration error task is displayed. The procurement specialist must address the error and then resubmit both the sourcing requests and negotiation event by selecting the Resubmit button.
      Note:
      Currently, errors are logged only on the Sourcing Outbound Queue table.
    • Suppliers are invited to participate in a bid and engage through the third-party application platform.
    • When quotes are returned, the Sourcing Bid Stage table is populated by the third-party solution and the information is processed internally within ServiceNow using a transform map to populate the purchase lines on the sourcing request.
      Note:
      When an RFx is created or awarded in the third-party tool, shoppers and sourcing managers are notified through emails and alerts from Shopping Hub and Source-to-Pay Workspace respectively. Shoppers and sourcing managers are also notified about rejected bids, irrespective of the integration.
    • If additional supplier bids are returned from the third-party solution, an existing logic in ServiceNow determines if a new supplier, supplier product record, or both must be created.
    • After awarding is done in ServiceNow, that information is sent back to the third party using the Awarded Supplier Outbound Queue table. Awarding can also be done in the third-party tool, in which case the data is received by ServiceNow.

    For information on sourcing request, negotiation, and negotiation event flows, see Sourcing request, Negotiations and Negotiation events, respectively. For more information, see Compare quotes and select a supplier.