2020 Predictions for Strategic Sourcing: Continuous Analysis Needed for Category Management

In today’s Spend Matters post about predicaments in strategic sourcing, we talked about the missing support of category management in existing e-sourcing solutions. The result of this is a lack of connection between the category management strategy and the tactical execution of sourcing events, which leads to a fragmented execution of the overall sourcing and procurement strategy.

To truly transform procurement you need to start from the top by defining your category management framework, then create the actual category strategies based in this framework and finally cascade this down into sourcing events as applicable. This is obviously doable without having a system to support it, but then, in my experience, you run a significant risk of creating category strategies once a year that you then put away and don’t look at until next year when it’s time for an update. By using a tool that has contract data, spend data and supplier management data (natively or through integration), you could create a dashboard that would support the continuous analysis of trends, risk, demands or supply changes. The defined strategy should also guide you to the right type of sourcing event with the right category-specific features and configuration.

Creating this type of solution is obviously not easy, especially the category strategy part, but we are seeing some interesting developments in the market and hearing some interesting things from vendors, and linking e-sourcing to category management is the next logical step in the evolution of sourcing technology.

In this Spend Matters PRO brief, we’ll look at a number of developments about how we believe this will play out.