Justifying Strategic Sourcing by Factoring in Corporate Culture
Categories: Procurement Commentary, Solution Providers, Spend Analysis | Tags: L2, Process and Best Practice
At our conference last week, Thomas Kase attempted to bridge the gap between the all-too-common “one size fits all” strategic sourcing and e-sourcing programs inside many companies with the need for truly customized programs. In his breakout session, An e-sourcing Survival Guide: Choosing the Best Fit Solutions for Your Organization, Thomas noted that one of the first steps in effectively developing an e-sourcing program is to size up your own corporate culture and decide collectively: who are you as a company and as a procurement group?
It’s important to put a number of factors on the table as those tasked with sourcing tool selection consider the right set of available implements to drive effective savings strategies. These types of questions include exploring, as Thomas suggests, the following types of variables:
- How large is our overall addressable spend? How is it “broken up” and where does it tend to fit or cluster in the Kraljic model?
- How large is our staff? What skill levels do they generally possess?
- Are we looking at selecting a regional, national, or multi-national solution?
- What are internal customer expectations around procurement and sourcing, and are there gaps between those tasked with sourcing and operations decisions and the front lines of the business?
- Is there mandated centralized procurement – or a distributed op-in model?
- Do we have a formal shared services and/or center of excellence approach to managing sourcing efforts or knowledge?
- Is the procurement organization marked by a do-it-yourself attitude or built on leveraging external services and outsourcing?
- Are we IT-led or technology-agnostic (i.e., best fit solution for the job)?
- Are we process driven or ad-hoc in decision making?
- How mature are we from an organizational model perspective?
- How important are non-procurement stakeholders in the context of actual sourcing processes itself (rather than just serving as inputs on the front end and the ultimate customers on the back end)?
- How sophisticated is our supply base? How much do they trust us and want to develop creative solutions to our needs?
These questions, of course, are just a start. But by putting on the table corporate culture and related elements, companies are bound to select the right technology for the purpose-built job. After all, no two procurement organizations are alike – and no two sourcing technologies are identical!
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