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Making Sourcing Savings Stick

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Published:  August 16, 2012
Access Level:   Free
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This Compass Series report delivers best practice techniques, technologies and general approaches that help procurement teams work with both finance and business stakeholders to set up and manage implementation of savings programs that go to the bottom line. Examples of how savings implementations can go wrong will be highlighted to educate readers about common missteps to avoid.

Making sourcing savings stick — procurement organizations in the initial stages of a transformation program tend to prioritize this after initial wave strategic sourcing efforts. Spend Matters’ experience suggests that superior sourcing programs are actually those that consider the ability to implement savings as early in the process as possible, even before categories, negotiations and supplier selection take place. There are many reasons behind this, plus some common pitfalls that we observe time and time again in making hard-fought sourcing savings stick.

The Spend Matters Compass draws content from two previously published pieces — the first, Realizing Value—Implementing Savings in a Global Market, a no longer available (online or in print) paper that was researched and written 10 years ago by Jason Busch, David Jungling, and Jay Odell, who were all at FreeMarkets (online reverse auction pioneer) at the time. Their analysis, in this updated form, is particularly germane for direct spends in manufacturing organizations. The second source of content comes courtesy of Archstone Consulting, a company that has graciously authorized us to reuse content from their recently published (on Spend Matters) — their analysis is insightful for all types of organizations and spend categories — including indirect and services spend.

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