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Market-Informed Sourcing: A game-changer for Procurement
In this paper, sponsored by BravoSolution, we suggest that the latest advanced sourcing technology brings opportunity for organisations – but only if procurement changes the current approach to Category Management, one of our most fundamental processes and methodologies.
We're not suggesting that "category management is dead" although we did consider that as a headline grabbing title! That's not really what we're saying. But we believe that for many categories, we need a fundamentally different approach, which the platforms available now will enable, and which will deliver significantly better value than current approaches. That approach requires a more open invitation to the market to allow suppliers to offer solutions that are economically advantageous to them, rather than procurement closing down the options through the category planning process. That often leads to a tender that requires suppliers to conform to a narrow template, the responses to which may be easy to analyse but will not offer such good value.
We also make a bold suggestion. One of the reasons that uptake of this technology has been slower than it should be is, we feel, confusion about the terminology. "Optimisation" sounds a bit mathematical and obtuse. And every provider has a different term, and while this may help them distinguish their offerings, it leads to confusion in practitioners' eyes. So from now on, including in this paper, we're going to be calling this process and family of technology solutions "market-informed sourcing" – or MIS for short.