With pressures mounting on supply management organizations to have a greater impact on the bottom line, the need to achieve better results faster continues to build. When creating a business case to drive acceleration, supply leaders must understand the pressures behind the “need for speed.” Meanwhile, strategies to accelerate the work vary. To ensure success, the appropriate strategy(ies) selected to address these business issues should take into consideration different stakeholder perspectives.

Strategic sourcing has been around for over 30 years. Throughout that time, practitioners have introduced a significant amount of innovation into the core process, including global sourcing, LCCS (low cost country sourcing), on-line RFPs, and performance scorecards/tracking. Despite these innovations, the average cycle time to complete a sourcing project (from opportunity assessment through contracting) has not decreased dramatically. In the early days of Strategic Sourcing, projects typically required nine to 12 months to complete. Today we are seeing average completion times closer to four to seven months. While an improvement of 50 percent may seem impressive, it pales in comparison to cycle times that have been driven down in other areas of the supply chain. Moreover, it raises a challenge for sourcing managers to improve the underlying process.

Obstacles that prevent the rapid execution of quality sourcing processes typically fall within one of four main categories:

While these challenges may seem insurmountable, leading organizations have discovered that they can overcome them with the right team in place using technology-enhanced process management, thereby accelerating the cadence of sourcing. A.T. Kearney’s Assessment of Excellence in Procurement surveyed more than 300 global organizations to understand which business practices differentiate procurement leaders from followers. When it comes to sourcing cycle times, those organizations that have implemented tools, upgraded talent and driven the adoption of lean processes, achieved the greatest results in terms of sourcing spend throughput, savings and cycle time reduction.

As noted above, the starting point for any sourcing effort and the first place to invest to dramatically drive down cycle times, is to obtain access to historical spend data. This includes visibility into level three and four data (e.g. line item, location, user, technical specification), organized in a coding structure that facilitates sourcing category roll-ups. Robust analytic capability is critical to prioritizing and managing the sourcing pipeline and process constituents.

This is consistent with business management practices noted by Thomas H. Davenport in his recent book Competing on Analytics. The best way to drive down sourcing cycle times is to eliminate the manual effort for category owners to access and analyze spend and forecast and demand data. Organizations that truly impact sourcing cycle times, however, will make further investments in accelerators for better and faster analytics including:

Collaboration becomes the critical element in assuring the adoption of and buy-in to future sourcing results, especially when recommendations suggest a move away from an incumbent supplier.

Sourcing dashboards are one way to encourage collaboration and communication. Dashboards provide a forum for exploring analytics, defining priorities, addressing issues, and managing process cadence. As the saying goes, “What gets measured, gets managed.” Dashboards can provide visibility into cycle times to execute each step in the sourcing process, identify bottlenecks, track employee performance (strengths and weaknesses), and highlight areas for action. Without a sourcing dashboard, it becomes impossible to identify and improve upon those tasks that require a significant amount of time to execute.

Finally it comes down to the right size, mix, and profile of talent needed to drive down the barriers to speed. Sourcing can no longer be considered a tactical process to be followed blindly. In fact, successful sourcing requires creativity and perseverance, drawing heavily upon:

Procurement is once again under pressure to reinvent itself and deliver more value faster with fewer professionals. Virtual teaming with collaborative processes and access to improving analytics and toolsets is creating the means for speed, the framework for results and the platform for sustaining category leadership despite the constant flow of talent. Is your organizational roadmap tracking for speed and analytics and giving you the edge needed to drive greater savings faster?