Surviving and Thriving: Why It’s Time to Reevaluate Sourcing

Sourcing in times of uncertainty

The world of sourcing has changed. And with it comes uncertainty and challenges.

But just like the hero’s journey, by facing trials and failure, sourcing is growing new skills, becoming stronger, smarter, and more influential than before. Its ascent has begun and the transformation is as inevitable as the narrative arc of any epic blockbuster.

Sourcing is evolving from being seen as a ruthless cost-cutting exercise to an enabler of managing spend and risk, meeting ESG and compliance requirements, and providing business resilience and agility to improve competitive advantage.

With the demands of an ever-connected digital world, there has been a paradigm shift from siloed procurement functions to the expectation of a fully connected digital organisation where procurement and finance are the new ‘power couple’ acting as the catalyst for digitalisation, compliance, insight and value creation.

Research from Hackett Group found that “Digital World Class® procurement organisations are able to influence or manage 20% more spend,” and have a 7x higher usage of e-auctions.

This increased responsibility requires a new level of professionalism. For too long, procurement has refused the call (or been a slave to the day-to-day). Existing weaknesses have been exposed from an over-reliance on legacy or archaic relationships and offshore suppliers, to a lack of decision-ready data, or a low adoption and knowledge of e-sourcing best practice and tools.

The need for strategic sourcing has been thrown into sharp focus. Companies are compelled to meticulously assess their sourcing strategies, critically evaluate supplier relationships, and realign their procurement approaches to not just survive, but to thrive in today’s uncertain times.

 The world of sourcing has changed. And with it comes uncertainty and challenges

Strategic sourcing: the great deliverer

To truly embrace strategic sourcing and reap the rewards, many companies will need to fully embrace change—the fear of change is powerful but the impact of no change will be catastrophic. 

And to drive change you need to win not just minds, but the hearts of people involved. It will take a true cross-departmental effort. Multi-level collaboration with both internal and external players.   

Procurement teams must also steer towards short term wins whilst maintaining course on their long term goals. Strategic sourcing can create far-reaching value when aligned with the business strategy and has the ability to adapt to the changing needs of the organisation.

“What is important is organisational agility that enables CPOs to adeptly shift focus and resources, as needed, to the critical initiatives of the quarter/year. To do so, CPO alignment with the C-suite is imperative,” CPO Rising 2023 report by Ardent Partners.

Technology’s role in this story is as a facilitator, a mentor and an accelerator. It has the ability to build a collective memory to aid future decisions, can make sense of complexity, identify future ruinous risks and game-changing opportunities.

Companies need e-sourcing tools that can be activated very fast in terms of implementation and user adoption, while future proofing the interoperability and scalability of tech stacks. 

This rhetoric is not new, we all know the pace of change and technology has never been faster and the aspiration of a fully connected insightful and influential procurement and finance partnership has been the goal of many. However, this dream has been out of touch for so many and a ‘nice to have’ for the wider masses.

But the bomb is ticking, if change is not embraced you risk obliteration.

Barriers of large scale, expensive, one size fits all technology, with little adoption has been the norm, but the age of pro-tech enlightenment is upon us. Accessible, connected best-of-breed and modular solutions provide the critical milestone on your path to stress-free value creation and influence.

The dawn of a new age is upon us, it is indeed an exciting time for procurement and finance teams

Mastering strategic sourcing

Some may see the current period of permacrisis as an ordeal to be endured, that it will come to an end and business will return to as it was before. 

Others know that these days have gone and are choosing to see it as a time of great opportunity and reward for those brave enough to enter ‘Plato’s cave’. Just like our blockbuster hero, organisations must adapt and transform to overcome the obstacles in their path.

The ‘road back’ entails reshaping supplier relationships, diversifying sourcing channels, and embracing cutting-edge technologies to enhance supply chain visibility and agility. 

This new world is rich with gifts such as AI and automation. And, by working together with other connected departments, procurement and finance can provide newfound insights and strategies toward renewed stability, competitive advantage and sustainable growth. 

The dawn of a new age is upon us, it is indeed an exciting time for procurement and finance teams.

To help you understand the future of the new rules of procurement engagement and take the next steps in your transformation journey, we have engaged with global influencers who are beacons of inspiration, setting new standards for effective strategic sourcing and serving as models for others to follow.

Join these Changemakers in Rule 2 of The New Rules of Procurement Engagement…

1. Reimagine Strategy – find out more
2. Reevaluate Sourcing – transform market access and performance
3. Reshape Supplier Relationships – coming soon
4. Redefine Value Creation – coming later