Strengthen Strategic Sourcing and Centralize Management of Common Categories

This post, written by Raj Sharma, originally appeared on Public Spend Forum

Strategic sourcing, while not new to the federal government, is still in many ways in its infancy. Most initiatives are being run with limited resources and no real integration of business processes. Many initiatives remain focused on consolidating contracts rather than focusing on all value drivers, including managing demand and improving supplier relationships. Even when some initiatives are able to generate value, compliance is low due to the decentralized nature of agencies. Going forward, government departments should complete the following objectives.

Establish Strategic Sourcing Functions

Current strategic sourcing initiatives should evolve into permanent organizations, led by an executive with significant experience in strategic sourcing. It will be important to ensure that people with the right skills and expertise are put in place to facilitate the sourcing process and engage stakeholders and suppliers.

Centralize Management of Noncritical Common Categories

At the outset, one of the key priorities for strategic sourcing should be to centralize the management and sourcing of all noncritical common categories. Support from top leadership, including the Cabinet secretary and chief financial officer, will be critical to building buy-in from all stakeholders and making necessary budget and financial decisions, if needed. When possible, these organizations should leverage and coordinate with efforts such as the governmentwide Federal Strategic Sourcing Initiative.

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