Make business leaders strategic-sourcing partners
By Lara Nichols -- Purchasing, 12/11/2008 2:00:00 AM
What comes to mind when you think about your company's approach to strategic sourcing? Spend analysis? Tools? Processes? Savings targets? Who comes to mind when you think about the development of your company's strategic sourcing plan? Sourcing professionals? The Chief (fill in the blank) Procurement/Finance/Executive Officer?
Successful strategic sourcing plans begin with people—a wide range of people, not just the experts in sourcing, procurement and finance. The best strategic sourcing plans begin with a partnership involving these experts, as well as business leaders, working as partners focused on meeting business objectives and obtaining the product or service to enable those objectives.
Strategic sourcing processes have been honed to a predictable science. However, along the way, many of us may have lost sight of the fundamental reason for sourcing initiatives: to assist the business in making the best possible supplier and product or service choice, while mitigating risk and returning money to the business' bottom line. The best way to achieve those goals: Get the business involved.
Here are seven simple practices that will ensure that strategic sourcing is part of your company's DNA:
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Always start with "business-in" project selection. When planning sourcing initiatives, start with stakeholder interviews. Learn about the upcoming business imperatives. Identify business challenges. Look for commonalities across multiple businesses. You will develop a comprehensive list of choices and gain energetic buy-in to invest time and resources.
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Ensure great decisions for your sourcing pipeline. Compare your new comprehensive list of choices using critical decision factors for your business. Common decision factors include potential for savings, availability of experts and required resources, speed of delivery, market dynamics and identified (internal or external) obstacles.
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Create an active Executive Sponsor function. You can get a lot of benefit from well-executed sponsorship roles. Sponsors learn high-level sourcing skills, accelerate project activities and lend credibility. The sponsorship role stretches leaders to develop new skills and enable cross-business unit objectives. Sponsors gain a new appreciation for the bottom-line impact of strategic sourcing.
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Enable business leaders to become sourcing savvy. Business leaders will gain significant skills by serving a "tour of duty" in strategic sourcing. Build a formal coaching process using your top sourcing experts to teach instead of consult.
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Communicate, Communicate, Communicate. Seek out opportunities to inform, gather feedback and update the company on sourcing work. Something about suppliers, new deals and sourcing successes captures attention. Use this interest to your advantage. Share plans, announce new deals and give updates routinely.
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Find ways to credit many. With an increased focus on resources, sponsorship and communication, there will be many opportunities to spotlight those who embrace and adopt the sourcing discipline. Maximize every opportunity and highlight every success.
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Ensure your sourcing processes include activities that involve people. Objectively review your current sourcing processes. Do you regularly engage many interested stakeholders? Improve your process by adding formal activities that require involvement. Ideas include: reviews at critical sourcing-decision points, advocacy for the role of the stakeholder and communicator, peer reviews at key points in the selection process, project reviews in leadership meetings, encouragement of sponsors to share project outcomes beyond the rollout and execution of non-traditional ways to involve a broad range of people.
The fundamentals of strategic sourcing will always be vital to your sourcing program's success. Augment them with a focus on people and their development, and the enthusiasm you build will help you deliver even more value.
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