We’re pleased to announce that Ardent Partners’ State of Strategic Sourcing Report 2013 is now available.
Subtitled: “Speed is Good, Agility is Better,” this research report dives deep into the strategic sourcing programs of the modern enterprise by analyzing more than 260 distinct procurement departments to uncover Best-in-Class competencies for improving the sourcing function and its results while also highlighting the market trends that are shaping strategic sourcing today. This report also utilizes market statistics to quantify the key differentiators that have enabled leading sourcing organizations to save significantly more than their peers. In an age where procurement transformation is often centered on strategic sourcing efforts, this report is designed to be a powerful resource for procurement organizations that are focused on driving value through their strategic sourcing efforts.
Here’s an excerpt:
Sourcing more, faster has long been procurement’s path to greater influence and savings and the impact from high volume sourcing can be a ‘game-changer’ for the Chief Procurement Officer and the sourcing team. But, once a sourcing organization has matured to a point where it can source 70% to 80% of its addressable spend annually, it must shift its focus from increasing sourcing volume (speed) to increasing sourcing quality (agility) if it is to maintain its momentum and continue to drive more value in the future. Best-in-Class sourcing leaders increasingly understand that while speed is good, agility is better.
The heightened volatility from a business world that is increasingly interconnected combined with a drive for innovation that has collapsed most product lifecycles means that the sourcing needs of a company are more apt to shift dramatically within a business cycle than in any previous time. Finding savings remains the ultimate goal of the Chief Procurement Officer (“CPO”), but missing a sales window because of short or poor supply can shake an enterprise from the top down to its core. And, in a business world that is increasingly focused on the short-term, sourcing results are under much greater scrutiny by executives and in some cases, external analysts, media, and investors. David Walker, a technology analyst at Trillium Asset Management in Boston, made the point when referring to supply pressures and general disruptions, “It hurts your brand [and] there is a cost to your multiple [or company valuation] when people think you can’t execute.” An enterprise’s “sourcing agility” is now directly linked to a company’s brand and overall value.
That does not mean that sourcing “speed” is unimportant or not desirable; it is and will continue to be. In fact, over the past four years, sourcing volumes have increased by more 30% to a level where 53% of all addressable spend is formally sourced by the average procurement department. Sourcing enabled many procurement departments to drive significant savings during the recent downturn and maintain their savings momentum when the economy improved. But, with the ongoing pressure on procurement and sourcing team headcounts, many groups will be challenged to continue the expansion of their sourcing programs. In an age where procurement transformation is centered on strategic sourcing efforts, it is critical for the contemporary organization to develop an effective means of maintaining and enhancing their sourcing programs. Certainly the use of process automation tools and third-party consultants can support program growth but sourcing teams must ensure that their investments help them to source smarter and more efficiently.
The report is sponsored by BravoSolution and can be accessed by clicking here (registration required).
