As a function the future of sourcing and procurement, much like several other professions, is in the midst of a major transformation. Simply increasing the “savings” goal of this organization by a certain percentage (typically arbitrary) year-over-year is an antiquated “strategy” that was never sustainable. The future state will always include some element of savings so we will focus this blog on establishing a repeatable process for setting savings expectations AND using this foundational approach to change the c-suite discuss from exclusivity of savings to value-based metrics that support business strategy.
As a corollary, it is our observation that ONE of the major reasons for the low regard / stature / profile of sourcing and procurement function among the business are based on the one-trick-pony adage: If ALL you do is based on one metric, savings, then that is all that will be expected. And, senior leaders will expect more of the same, every year. A discussion on foundational metrics for re-establishing a sustainable sourcing and procurement function will be discussed on a future blog.
The first step starts with a vision. For example:
A consolidated, real-time dashboard that presents historic data, forecasts trends and integrates third party information from which business decisions can be formulated.
From a vision, we recommend assembling critical-to-success factors. For example:
- Intelligence – not just data
- Real-time dash boarding with forecasting
- Integrated within MS Office
- Rules based viewing – data displayed is unique to the role
- 24-7 availability via web browser
- Secure, cloud, subscription-based services
Assuming that savings is a primary goal, sourcing and procurement organizations must establish a foundation based on data.