BravoSolution recently partnered with Ardent's Andrew Bartolini to develop a simple, Excel-based category scorecard. The goal is to help companies identify optimal sourcing and related opportunities through comparative category opportunity analysis beyond just looking at the numbers. In explaining the scorecard approach he's taken, Andrew notes that "the category sourcing scorecard was designed to rank a wide range of direct, indirect and service categories ... the responses given must be viewed in the context of a specific sourcing team and group of categories."
Our observation is that the thing is a cleverly simple tool – only 22 questions long – to get procurement organizations, spend owners and other stakeholders on the same page to evaluate comparative opportunities. Based on the inputs, the scorecard spits out a graphical ranking of category attractiveness.
The inputs demand a bit of homework from a company, but not that much. For example, under internal/organizational factors, questions include savings potential, contract status, stakeholder engagement, number of stakeholders and availability of spend and related historical data. For markets, fields requested include the number of potential suppliers that can bid on a category, substitutes, and buyer leverage.
Supplier factors include questions that tackle supply market dynamics including the need for truly specialized capabilities (or not), value-added services, etc. Buyer factors include questions around risk, volumes and switching costs. And last, category specific factors focus on overall nuances, complexity, business value (impact on) and investment required to tackle it.
The generic, non-category specific nature of the scorecard approach is both its greatest asset and risk. But at worst, even if it doesn't surface category specific nuances and requirements, Andrew's scorecard will get folks talking and surfacing issues up-front before initial strategy and category decisions are made. It's something you won't find any argument from us with, especially given that the failure to ask these questions is what so often jeopardizes savings implementation!
Download the category scorecard on Bravo's site by clicking here.