If you’re like many CPOs and procurement executives, you often run the gauntlet of finance and others asking for details on annualized savings numbers. Cost savings remain a major component of the value that strategic sourcing offers most organizations and, as with many things in life, what’s good can always be better.
No wonder then that, according to a recent report from Ardent Partners, identifying more savings opportunities ranks as a top business pressure for 65% of CPOs. In The State of Strategic Sourcing 2013: Speed is Good, Agility is Better, analyst Andrew Bartolini looks closely at what forward-thinking CPOs are doing with supply management strategies to push to the next horizon of savings with strategic sourcing.
Turns out that there’s still more to be gained from strategic sourcing. Best-in-class sourcing organizations have a rate of cost of savings that is more than 3.5 times that of other organizations. These organizations tap into several key strategies and capabilities to drive sustainable, repeatable cost savings, including
- Highly standardized sourcing processes
- The application of spend data or intelligence to identify sourcing opportunities
- Standardized contracting processes
If you’re feeling the pressure to up your cost-savings game, check out the report The State of Strategic Sourcing 2013 to benchmark your organization against peers and leaders before your next meeting with the finance team. You might affirm that, based on what you are doing today, your own sourcing organization is among the best-in-class. If not, you can quickly see what gaps you need to address and what you can do now to move from good to great.