Thrust into the spotlight due to the pandemic and now the war in Ukraine, the demand for sourcing professionals to deliver maximum value has never been greater.
To start, "maximum value" is no longer about getting something at the best price – if it ever was. I base the "ever was" on the words of a 20-plus-year industry veteran who has held senior executive positions with a major global brand and stressed that it has never really been about cost savings alone. If it were, they added, they would have left the industry a year and a half after they started.
So, if it isn't about cost savings, what is it about?
It is about agility, resilience, and being strategic. It is also about breaking through existing barriers to achieve optimal outcomes through digital transformation. In other words, the merger of people skills with emerging digital tools such as Life Cycle Contract Management (CLM) solutions.
The Seven Steps to Success in Sourcing paper was written with the above objectives in mind.
Beyond providing an outline of the challenges with which sourcing professionals are now contending, in this article, I will review the paper's "seven steps" within the context of a CLM framework. Included will be a deeper dive into one of the steps – Improving transparency.
Barriers To Agility
The paper talks about the challenges of "cumbersome siloed data" and points out that sourcing professionals are weighed down (and slowed down) by "outdated traditional systems" and "complex, often manual" processes.
While these have been significant issues, they take on new meaning in a post-pandemic world, a new meaning in which supply chain resiliency is being stretched to the breaking point.
As a result, the risk of "slow, inflexible sourcing processes" reduces agility and, with it, the ability to adapt to the at times, unpredictable changes in the marketplace.
Besides making it difficult to streamline workflows, said inflexibility also hinders the optimization of the "larger source-to-contract process." The only way to overcome or break through these barriers is for sourcing professionals to develop the skills and effectively leverage the tools to create an "agile sourcing practice."
To get to this point of agility, there are seven steps which are as follows:
- Build a contract repository to improve transparency
- Extract valuable data to gain "actionable" knowledge
- Harmonize templates to optimize the agreement process
- Streamline supplier onboarding to facilitate information intake better
- Track vendor performance and compliance to mitigate risk
- Find opportunities to improve savings and increase value to optimize spend
- Automate the source-to-contract process to save time and effort
Transparency = Clarity
With timely access to critical information that is accurately "synthetized" across their entire contract database, sourcing professionals will gain the unprecedented clarity to turn data into actionable knowledge. I am talking about achieving full transparency to effectively assess fluid situations in real-time to transform their decision-making process.
What does it mean to "transform the decision-making process?"
It is the ability to enable sourcing professionals to proactively manage contracts across the board with greater transparency and certainty. The immediate benefit is having better insight into supplier relationships and contracts, transitioning your organization from a reactive oversight/enforcement posture to a proactive position that will minimize risks and optimize outcomes regardless of the circumstances.
Once again, I am only providing a high-level overview of the Seven Steps to Success in Sourcing. Download your copy of this vital paper today to get the whole story.
Mary Zampino is the Vice President – Content, Research & Analytics at SIG and has over 20 years of experience in information technology and over 15 years of experience in sourcing. Prior to joining SIG, Mary worked at Enporion, where she was responsible for the analysis, configuration, execution and award evaluation for over one thousand sourcing events, across a diverse range of direct and indirect categories. Mary is committed to customer service and considers information sharing and usability the top priorities for any project or organization. Mary holds a Bachelor's Degree in Information Science from the Florida State University and has completed certifications in Health Information Technology and Requirements Gathering.