Ardent Partners is pleased to announce the publication of The State of Strategic Sourcing 2015: The Four Pillars of Sourcing Success report. Interested readers can download this exciting and informative annual research report by clicking here.
Every year, the pace of business continues to accelerate, forcing enterprise sourcing teams to adapt to changes and shifts within global markets in order to stay competitive. Although workloads and responsibilities continue to increase, sourcing teams remain understaffed with little relief in sight. As a result, collaboration, early engagement, process linkage, and automation have become valuable force multipliers to help extend a sourcing team’s impact throughout the enterprise, even as it remains stretched to its limits. This article series, based on the annual State of Strategic Sourcing report, will examine the pressures and challenges facing sourcing leaders today, as well as the capabilities and technologies that they bring to bear. It will conclude with a discussion of Best-in-Class performance, followed by recommended strategies that sourcing teams can employ to accelerate their souring game into 2016.
eSourcing
Of all the sourcing capabilities at the disposal of the Chief Procurement Officer (CPO) and their staff, automated, digital sourcing (aka, eSourcing, which includes reverse auction functionality) is perhaps the most valuable. eSourcing tools can be used to conduct market research, supplier discovery, and source hard-to-find categories and commodities. They can also bring buyers and suppliers together in an online environment where buyers issue RFIs, RFPs, and RFQs for goods and services to fulfill enterprise needs, and suppliers respond and competitively bid on sourcing projects. Sourcing teams can pull in spend intelligence and analysis to understand historical and current spending habits, compare bidders, and select the supplier that offers the most value.
eSourcing tools can increase efficiencies for sourcing teams, which can dramatically increase the frequency and number of sourcing events that they conduct. In turn, they can increase the percentage of spend that is formally sourced, the percentage of spend under management, and ultimately drive more cost savings through the sourcing process. eSourcing solutions and tools are so valuable that in 2015, no sourcing program can be considered truly “strategic” without one. According to Ardent Partners’ recent survey of over 300 CPOs and supply management leaders, 48% of all sourcing teams currently deploy an eSourcing tool, with another 29% planning to adopt them in the near future. Although these are the highest current adoption levels of all sourcing tools in 2015, a majority of sourcing teams still do not deploy them.
Final Thoughts
Although it is encouraging to see nearly 50% of CPOs and sourcing teams deploying eSourcing solutions and tools in 2015, with strong future adoption planned for the next few years, more CPOs and sourcing teams need to automate sourcing in 2016 in order to elevate their programs to a truly “strategic” level. eSourcing tools are repeatable, scalable, and can be linked and standardized with other strategic sourcing sub-processes, like spend analysis, in order to maximize the value of each. In fact, when linked and standardized, the value of a fully-automated eSourcing solution can be greater than the sum of its parts. Thus, CPOs ought to prioritize the adoption of eSourcing tools, along with automated spend analysis solutions, in 2016 as part of any effort to transform procurement and increase its performance.
eSourcing will be just one of many topics of discussion at Ardent Partners’ inaugural CPO Rising procurement executive summit, which will be held at the Harvard Club of Boston in March 2016. Preview and register for the event by clicking here!
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Tagged in: Adoption, Ardent Partners Research, Ardent Team, Chief Procurement Officer, CPO, Process, Sourcing, Technology
