Sourcing Complexity: Factoring Into Account Stakeholders and Requirements

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This post is based on content from a white paper authored by Spend Matters UK/Europe’s Peter Smith: What defines complex sourcing – and why does it matter? In past lives, Peter tackled sourcing and procurement initiatives as both a private and public sector CPO. He wishes the technologies available today that can enable procurement to pursue complex sourcing programs were around during his various tours of procurement duty.

Perhaps the most obvious internal driver of complexity comes from the range of product or service users, budget holders or other internal stakeholders who have an interest in the category, item or project being considered. Experienced category managers know that managing a single stakeholder can be challenging but inherently a whole lot easier than trying to get multiple stakeholders aligned with a particular category strategy or market approach.

Agreeing to specifications, capturing personal preferences and mitigating the risks around any inappropriate preferences, as well as the logistics of gaining agreement or involving stakeholders in the procurement process appropriately all add up to potential headaches for the buyer and greater complexity.

In addition, the physical breadth and diversity of the requirement is an important factor for consideration in sourcing complexity. The physical spread of the requirement is often related to the last factor but is subtly different, and we could conceivably have few stakeholders but a very well-spread geographic need. Putting it simply, if goods or services need to be delivered or provided to many different locations, widely spread around many parts of the world, the sourcing will inevitably be more complex than a simple delivery to one point. This factor complicates the pure administration of the sourcing process and opens up more options in terms of supplier strategies, number of suppliers selected and the like.

Finally, the number of line items, variants and lots are also internal drivers of sourcing complexity for particular programs. Read the full paper for more information on these considerations.

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