Originally aired November 13, 2025 on Extropy On AIr.
Procurement may start with a contract, but sourcing is where organizations really shape their cost, quality, resilience and innovation. In this episode of our Raindrop partner series, Kevin Zirkle of Extropy Advisors and Ward Karson, COO of Raindrop, talk about why spreadsheets and email chains can’t keep up, how AI is changing strategic sourcing, and real client results, including more than $1 million in savings.
Listen: Extropy On AIr podcast page | Spotify
Key takeaways
- Most sourcing teams are overwhelmed: too many events, too little bandwidth and no central visibility.
- AI now helps build events, guide supplier pricing, normalize bids, recommend scoring and suppliers, flag risk and summarize events in one click.
- Category-specific templates give business units flexibility while keeping structure and governance intact.
- Sourcing can run on its own and hand off to an existing P2P platform, with no rip and replace.
- For CFOs, strategic sourcing is about margin creation, not just cost savings.
Why do sourcing teams struggle today?
Ward says most sourcing teams are overwhelmed. They have too many events, too little bandwidth and no new headcount coming. They rely on manual tools or legacy systems that can’t support complex scoring or multi-round negotiations, with no central visibility, limited collaboration and a lot of rework.
Kevin shared a client that was running 80 sourcing events with two full-time buyers, mostly by copying and pasting last year’s events. There was no time for optimization, innovation or negotiation. It was survival. And when a buyer leaves, half the sourcing playbook can walk out the door with them.
From a CFO lens, that creates risk: higher costs, poor supplier choices and compliance gaps. Without a modern sourcing solution, it is hard to ensure competitive bidding, evaluate suppliers objectively or prove you secured the best value.
How does Raindrop approach strategic sourcing?
Raindrop’s sourcing module is built to be powerful but intuitive. Core features include:
- AI-generated events. Start from a template, or ask Rain, Raindrop’s AI assistant, to create an event based on a commodity type or past event.
- Weighted scoring with both price and non-price criteria.
- Real-time supplier engagement and messaging before, during and after the event.
- Side-by-side bid comparisons and an optimization engine based on metrics like price or incumbent supplier.
- Integrated negotiation rounds that continue in the same event, so knowledge carries forward automatically.
- Award documentation and a full audit trail.
Sourcing can be used on its own or connected to supplier management and contracts for a full lifecycle view. Kevin also likes that event templates aren’t one size fits all. A sourcing event for a software license looks very different from one for packaging materials, but both follow the same business logic behind the scenes, and clients can build their own.
Where does AI move the needle in sourcing?
- Expressive bidding. AI guides bidding suppliers on pricing by rank, by lot or down to a single line item, creating real-time cost compression.
- Bid normalization. AI parses line items, attachments and comments and maps them into a standardized grid, adjusting for units of measure, currency and lead times. Hours of spreadsheet cleanup now take minutes.
- Scoring recommendations based on historical sourcing patterns and risk profiles.
- Supplier recommendations by event type, commodity or geography.
- Risk flagging for anomalies like price outliers and compliance concerns.
- Event summarization. One click creates a briefing on savings, risk and bidders for approvers who don’t have time to review thousands of line items.
Ward calls this pre-award intelligence: helping clients make smarter decisions before the PO is cut. AI can even help before an event starts, by showing which suppliers you have bought similar items from, drawing on Raindrop’s marketplace and running AI-based supplier discovery against criteria like commodity, revenue size and location. Ward calls it look-ahead sourcing, where AI becomes the sourcing strategist, not just an analyst.
What results are Raindrop clients seeing?
Ward shared two examples:
- A chemical manufacturer had 18 sourcing events on hold and a large cost savings target. It went from a fully manual process in Outlook, Excel and Word to live on Raindrop in under three weeks, launched all 18 events with custom templates and secured more than $1 million in operating cost savings.
- One of the world’s largest technology and hardware firms uses Raindrop for sourcing construction, professional services and IT. After moving off an outdated legacy system, its commodity managers can launch events in 15 to 30 minutes.
How can business units run their own sourcing events?
Ward says the days of throttling everything through procurement are over. Raindrop supports tiered access and guided workflows, so a regional operations manager can launch a low-risk sourcing event from an approved template while procurement keeps full visibility. Kevin calls it sourcing as a service: the center of excellence creates the playbook, and business units execute within the guardrails.
How does sourcing fit with an existing P2P platform?
Raindrop can run sourcing events independently and push supplier selection, scoring or contract terms to other platforms through RainConnect, its API-first integration layer. For a client using SAP Ariba for procurement, for example, Raindrop runs the sourcing event, captures the scoring and award logic, then passes the winning supplier into Ariba to trigger a contract or PO. Kevin notes it has been a theme of the whole series: augmenting what clients have, not rip and replace.
Why should CFOs care about sourcing?
Because sourcing isn’t just about cost anymore. Ward says it is about margin creation, resilience, innovation and risk. If you source better, you buy better, and that directly impacts the bottom line. Kevin has seen private equity-backed companies use strategic sourcing as one of the fastest ways to unlock EBITDA improvement, but only when the tools enable teams instead of overwhelming them. That is why adoption matters: power users need depth, and casual or regional users shouldn’t get lost.
In their words
If you source better, you buy better. And that directly impacts your bottom line.
Ward Karson, Raindrop
I think strategic sourcing is one of the biggest levers that a CFO can pull.
Kevin Zirkle, Extropy Advisors
About the speakers
Kevin Zirkle is Director of Business Development at Extropy Advisors, where he works across Extropy’s partner ecosystem, matching organizations with the right technology and the right people to move transformation from the whiteboard into production.
Ward Karson is Chief Operating Officer at Raindrop, a spend management platform covering sourcing, contracts, supplier management, e-procurement and analytics.
FAQ
Why do sourcing teams struggle with spreadsheets and email?
Most sourcing teams have too many events and too little bandwidth. Manual tools make it hard to run competitive bidding, score suppliers objectively, track savings by event and enforce policy across regions, and institutional knowledge walks out the door when a buyer leaves.
What is bid normalization in strategic sourcing?
Bid normalization takes supplier responses in different formats, including line items, attachments and comments, and maps them into one standardized comparison grid, adjusting for units of measure, currency and lead times. Work that used to take hours of spreadsheet cleanup takes minutes and is more accurate.
Can a sourcing tool work alongside an existing P2P platform?
Yes. Raindrop can run sourcing events on its own and pass the winning supplier, scoring and award data to another procurement platform, such as SAP Ariba, to trigger a contract or PO. Teams get better sourcing without replacing their whole tech stack.
Why should CFOs care about strategic sourcing?
Sourcing is no longer just about cost. It drives margin, resilience, innovation and risk. Better sourcing means better buying, which directly impacts the bottom line, and for many companies it is one of the fastest ways to improve EBITDA.
Keep exploring
- More from our partner series on Extropy On AIr
- Next in the Raindrop series: Compliance, Visibility, and Control with Raindrop
- Previous in the Raindrop series: Know Your Suppliers: Streamlined, Smart, and Secure with Raindrop + Extropy
- Raindrop series finale: Inside Raindrop: The Next Era of AI-Driven Procurement
- Why Extropy
Ready to turn sourcing into a margin lever? Book a discovery call with our team.
