Sourcing Optimisation: reach the next level in Digital Procurement
Increasing Procurement impact by leveraging data and automation with advanced technology
We are experiencing unprecedented times in terms of supply security and efficiency. Simultaneously, the pressure to deliver increased savings from more events is equally prevalent in conversations. While these needs seem to be contradictory, they are mostly allocation problems that can be solved by unfolding the potentials of Digital Procurement.
When working with our clients, we keep hearing questions on how sourcing can become more efficient as well as deliver improved outcomes. The underlying motivations can range from urgent demands for products, to pressure to reduce cost. What is clear is that companies that lead the way in Procurement have one thing in common: they all have digital tools in place that facilitate and optimise their sourcing activities. Many technologies have been around for decades – yet adoption is often still in its infancy. Sourcing Optimisation is the next step on the ladder and a way for organisations to push forward with their digitalisation journey and boost their strategic relevance to the business.
Technology, the great enabler
We believe that the increased speed of digital disruption and change seen in Procurement today will further intensify. In combination with the ever-increasing complexity of products and processes and ongoing pressure on resources, these developments will put further stress on organisations. Companies will need to review their operating models, including people, processes and technology, to respond to these internal and external pressures.
Evolution of Digital Sourcing
Procurement technology can mitigate some of these developments by providing advanced analytical capabilities and by automating manual processes. Advanced sourcing tools provide capabilities to compute optimal award decisions, incorporating internal and external supply constraints, risks and commercial considerations. In the right environment, these components enable sourcing managers to make better decisions in real time that result in improved outcomes.
Complex sourcing is not just what others do
These outcomes are welcome across industries and organisations. However, we see a tendency for organisations to underestimate the complexity of their sourcing requirements. Complex sourcing requirements exist in Direct Materials and Indirect spend categories alike. In either case, intricate structures and matrices quickly make sourcing events complex and hard to manage. Analysing such tenders in Excel is cumbersome, highly error-prone and inefficient. Therefore, we believe that Sourcing Optimisation can deliver benefits independent of the commodities involved. The deep dives presented in our Point of View provide an overview of potential use cases to explore, based on our project experience and discussions with our clients and solution partners.
Overview of potential categories relevant for Sourcing Optimisation
Partnering with best-in-class solution providers
In May 2020 we collaborated with Coupa, one of our partners in Digital Procurement and Sourcing Optimisation, to host a webinar that discussed the opportunities offered by tool-based Sourcing Optimisation. We shared and discussed best practices and insights on how advanced sourcing tools can support businesses on their digitalisation journey and increase Procurement’s impact on the organisation. We are now making the recording and materials available to a wider audience so that you can investigate the content from our Point of View further. You will hear perspectives on potential use cases and see how advanced sourcing tools differ from normal eProcurement suites.
While the external pressure on efficiency and impact increases, every organisation sourcing complex goods and services should explore how Sourcing Optimisation can be a building block in their digitalisation journey and enhance the impact Procurement delivers to the organisation. The available resources will allow you to start the conversation with us, your internal stakeholders and tool-providers alike.