Posted by Matthew York on November 13th, 2015
Stored in Articles, Chief Procurement Officers, People, Process, Strategic Sourcing, Strategy, Technology
Ardent Partners is pleased to announce the publication of The State of Strategic Sourcing 2015: The Four Pillars of Sourcing Success report.
In 2015, Chief Procurement Officers (“CPOs”) and other sourcing and procurement leaders operate within a global business environment home to many opportunities, possibilities, challenges, and risks that seem to expand annually. The last 25 years have made the world smaller, distances shorter, suppliers more plentiful, timelines tighter, risks higher and wider, and rewards greater. For enterprises of all sizes and maturity classes, when it comes to sourcing, shooting from the hip and hoping for the best is no longer an option. All organizations, from garage-space startups to multinational corporations, need to be deliberate and strategic with their sourcing activities to succeed today, tomorrow, and in the days and years ahead.
Ardent Partners believes that there are “four pillars” that should serve as the foundation for any strategic sourcing program. These are the primary sub-process areas that drive all sourcing activity – spend analysis, sourcing, contract management, and supplier management. By themselves, each pillar can play a critical role in helping a team properly source a business requirement. And yet, when all are logically combined and leveraged in total, the whole is radically greater than the sum of its parts. Ardent Partners research has shown that the returns on an incremental investment made to extend and/or automate the strategic sourcing process from one pillar to the next can yield significant and long-lasting returns. Automating and integrating these four areas creates a reinforced structure that serves global sourcing and procurement organizations significantly better than if they tried managing each process manually and in an ad-hoc manner.
More broadly, building and managing a modern strategic sourcing program is somewhat akin to building and maintaining a home. Even the most expensive and beautifully-designed home will age/wear and erode value at a significantly faster rate when it is built upon a cracked, slanted, or weak foundation. CPOs and other sourcing leaders who invest the time and resources to build a top sourcing operation must understand that while the blueprint (the sourcing transformation plan), builders (the team), and the actual home development (plan execution) are critical, a foundation that fails to actively incorporate the four pillars will ultimately fail to optimize the team’s performance and impact.
Apart from adopting and standardizing each of the four strategic sourcing pillars, CPOs and business leaders need to “connect the dots” between them in order to maximize the value from a strategic sourcing program. The glue that binds them all is as important as the pieces, themselves.
The State of Strategic Sourcing 2015: The Four Pillars of Sourcing Success is chock full of excellent insights and useful recommendations derived from the experiences and perspectives of over 300 CPOs and business leaders.