In the first part of this blog series we tried to illustrate the role that sourcing plays in the success of an organisation’s procurement strategy. It’s clear, having a strong sourcing process in place can help deliver significant savings and get more value from the procurement function.
But how do we get sourcing to that level? Talking to procurement leaders from various industries and company sizes we noticed that a lot of them struggle with lack of time and resource, especially when it comes to the amount of admin that needs to be taken care of.
There are multiple ways in which these problems can be solved, from implementing procurement software or a specific sourcing module, to bringing in external help to assist with the heavy lifting.
But before jumping into any of these actions, companies should run an assessment of their current situation. This will help identify the problems, even the ones beneath the surface, the areas where they lack resource or areas where resources aren’t used properly.
When carrying out an assessment of their sourcing processes companies need to think about:
- How they are using their resources
- What they need to ask of their external procurement partners to ensure excellence and achieve the desired result in less time
We believe it’s important for procurement leaders to know their procurement organisation in detail so that they can make well informed decisions. This is why we created a 6 steps to sourcing excellence self-assessment. This process is aimed at helping organisations identify their trouble areas, but also get a clear view of their skills and strengths. In turn this will help them do right by their resource allocation process, create trust and drive the right results.
There are a number of aspects that procurement needs to get into place so that it can ensure a strategic approach and a robust environment for its function. We believe these 4 to be vital:
- A good understanding of its spend.
- Systems to automate sourcing – both for efficiency and to drive savings through greater competition.
- A motivated team with the right skills.
- A repeatable process or framework that can be adapted for different areas of spend.
Our 6-step process helps illustrate the different levels of expertise, knowledge and skill required at each point in the process. Here are the 6 areas that you should be assessing, in terms of expertise and resource, as part of your journey to sourcing excellence:
- Spend/opportunity analysis & roadmap creation
- Category analysis
- Event design
- Event build & preparation
- Event management
- Contract execution & management
For a more detailed overview of these 6 steps have a look at our “The Quest to Sourcing Excellence” eBook, as we break down the process into specific areas in the form of a self-assessment questionnaire.
Having a clear overview of where you stand in these areas will give you the knowledge to decide whether you need to outsource, partner with external consultants or you have the right in-house capabilities in these areas.
You might think, “doing the self-assessment takes time, which I didn’t have in the first place”. Agreed, but it’s time well invested, because it helps you reallocate resources, and outlines your gaps so that in time you can deliver better results and run efficient processes.
Now that you have identified where your strengths and expertise lies, you will be better placed to understand if your skills and knowledge are being used effectively. Stay tuned for part 3 of this blog series as we share some tips from our procurement experts on driving better results from your sourcing process.