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Empowering Decisions
May 24, 2018

Forget Everything You Know About Strategic Sourcing.

Forget Everything You Know About Strategic Sourcing.

Instead of “recycle, reuse, retread” let’s talk about a reboot.

Memorization is a frontage road: It runs parallel to the best parts of learning, never intersecting. It’s a detour around all the action, a way of knowing without learning, of answering without understanding.”

— Ben Orlin, “When Memorization Gets in the Way of Learning,” The Atlantic, 9 September 2013

Strategic sourcing has recently received a spike in attention. Determine Vice President of Sales Sean Delaney discussed sourcing trends with SIG CEO Dawn Tiura on the Sourcing Industry Landscape podcast. An early look at Ardent Partners’ 2018 CPO Rising report revealed that for the first time this year sourcing has fallen out of the top 10 strategies employed by leading CPOs. And I followed that revelation by digging into the meaning and implications of this shift (Face it sourcing, CPOs just aren’t that into you…).

CPO Rising 2018: The Age of Intelligence

Strategic sourcing had better hope that the saying about there being no such thing as bad publicity is true, because very little of the attention it has gotten recently has been good.

And yet, blaming strategic sourcing for falling out of alignment with procurement’s priorities is like blaming your car for that last fender bender you had. Circumstances notwithstanding, as the driver you have to look in the mirror and contemplate your role in the incident.

The biggest problem with strategic sourcing is that it isn’t strategic anymore. As suggested by the opening quote from The Atlantic, we’ve gotten so used to following the process of sourcing from memory that we aren’t actively engaging with it. If we are going to pull sourcing back from the edge, we need to look at it with fresh eyes, rediscovering its potential for value-driven spend management.

Since we’ve already established that procurement has looked over the strategic sourcing process a few (hundred) times too many to be objective about it, whose eyes can we borrow to see it again for the first time?

Sales

I could suggest that you solicit feedback from supplier partners, but they have too much skin in the game to be as objective and constructive about sourcing as procurement needs. A much better option is to speak with your own company’s sales team. How does your current process put them at a disadvantage or force them to put their “A-Game” on display? If they were to assign priority to the steps, or allocate a percentage of procurement’s time and effort to each stage of the process, where would they put the emphasis, and why?

Summer Interns

The amazing thing about summer interns is that they combine all the enthusiasm of bright new minds at the outset of promising careers with a complete absence of established corporate conventions (“So, you’re saying I shouldn’t have emailed that file to everyone who works at the company?”) You can’t take anything for granted when giving them direction because they haven’t been indoctrinated about how things are “supposed” to be. Not only will they focus in on the parts of strategic sourcing that are missing, repetitive, or overly laborious, they may also have some great suggestions about how increased digitalization should be allowed to change the process for the better.

Procurement Solution Provider

No one – except maybe the CEO – wants procurement to succeed more than your technology provider. If you win, they win. Chances are, your sourcing process has been in place for more than 18 months without a serious review. Actually, that’s probably being generous; Raise your hand if your sourcing process slide pre-dates Twitter. At the same time, the opposite is likely true of your strategic sourcing solution. SaaS technology is constantly being updated and improved. If your technology tools have changed in the last 18 months, but your sourcing process hasn’t, you’re almost definitely doing something too “manual” — and missing out on new opportunities to leverage data and analytics. This is also an opportunity to learn from professionals who are constantly working with companies with different sourcing processes you could learn from.

Strategic sourcing, “legacy” process thought it may be, played a huge role in making procurement the function it is today. Rather than walking away, procurement should focus on the objectives behind strategic sourcing – not the same old steps you’ve seen thousands of times – and make the necessary changes for it to enter or drive the next phase of procurement ‘s evolution. After all, few procurement processes have caught on with the same wildfire as sourcing. We just have to make sure it isn’t left behind as procurement reaches a new level of maturity and assumes responsibility for managing increasingly complex categories of spend.


If you’re in the process of rethinking and rebooting your sourcing process and technology, there’s no better time to schedule a personalized demonstration of our modular Sourcing solution on the Determine Cloud Platform.

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