There’s not a lot of debate about the value strategic sourcing plays in driving cost-savings. Best-in-class sourcing organizations, talked about in our last blog post, use strategic sourcing to drive almost 12% in year-over-year cost reductions, vs. others who average just over 3%.
Having proven it works, what’s next then for the discipline? Beyond speed, or volume, sourcing organizations will be differentiated by agility, or as defined by analyst Andrew Bartolini of Ardent Partners, sourcing quality.
In the July 2013 report “The State of Strategic Sourcing 2013: Speed is Good, Agility is Better,” Bartolini outlines the next model for sourcing excellence. What’s different? Procurement organizations move from a tactical position of driving more value from suppliers for less money to one where
- Procurement engages with a wide range of organizational leaders to align sourcing strategy directly with business strategy,
- The scope of sourcing events increases to include large, multi-functional strategic projects, and
- Rigorous processes provide a framework to streamline tactical sourcing events and guides more nuanced approaches that allow for flexibility based on the strategic nature of each opportunity
Are we using e-sourcing technology to improve all aspects of our sourcing process?
- What kind of spend intelligence are we capturing and how well are we applying it to sourcing decisions?
- How far way are we from a fully integrated source-to-settle process?
- What’s our talent profile today? What do we need for tomorrow?
- How collaborative are supplier relationships?
- How fragmented is our approach to sourcing? What can we do to apply strategic sourcing to more aspects of our business?
- Working capital effectiveness
- Acceleration of new corporate strategies
- Lower risk when expanding into new markets
- More accuracy in demand forecasting