Publisher’s Note: In 2019, Ardent Partners is celebrating 10 years of delivering “Research with Results” to Chief Procurement Officers (CPOs) and other readers of this site, including published reports, eBooks, presentations, insights, articles and events. To commemorate the occasion, we are going to reflect on the firm’s first decade by presenting this weekly “throwback” series that will include a blend of top articles from our earlier days on this site. Despite procurement’s recent advances, we believe these articles are as topical and relevant as the day they were published. And, in light of our fourth-annual procurement executive summit, CPO Rising, now just a few weeks away, we thought this particular article is most appropriate for a throwback. Enjoy!
Agility noun \ə-ˈji-lə-tē\
1. ease and grace in physical activity
2. the power of moving quickly and easily; nimbleness: exercises demanding agility.
3. the ability to think and draw conclusions quickly; intellectual acuity.
Researchers from the Structure & Motion Laboratory in The Royal Veterinary College at the University of London, Hatfield and the Botswana Predator Conservation Trust published a paper on cheetahs this week in the journal, Nature. The study tracked the hunting runs of five cheetahs over a nine month period using a technology that took the team ten years to develop. I read about the study in yesterday’s New York Times which began:
Anyone who has watched a cheetah run down an antelope knows that these cats are impressively fast. But it turns out that speed is not the secret to their prodigious hunting skills: a novel study of how cheetahs chase prey in the wild shows that it is their agility — their skill at leaping sideways, changing directions abruptly and slowing down quickly — that gives those antelope such bad odds.
Cheetahs are the fastest land animals (by a significant margin), but it is their ability to nimbly accelerate and decelerate that makes them, according to one researcher, “the all-around athletes, the all-around pursuit predators.”
As with most things, after I read this article, my thoughts quickly turned to eSourcing and sourcing in general……
As we will show in my upcoming State of Strategic Sourcing report, Best-in-Class sourcing organizations source more than 80% of their addressable spend – this means that when it comes to sourcing, they are fast (like a cheetah). For most organizations, sourcing “speed” (or high sourcing volumes) contributes greatly to expanding procurement’s influence within the enterprise (it is also key to hitting savings targets). The impact from high volume sourcing can be a ‘game-changer’ for the relatively immature sourcing team and it is one reason why I am such a strong proponent of eSourcing 2.0.
But, once an organization has matured and mastered its sourcing process to a point where it can source 70-80% of its spend annually, it must shift from a focus on volume (speed) to a focus on quality (agility) if it is to continue to increase its value contribution. I am reminded of two companies – a large multinational and a supply management solution provider.
Agile Strategy
I recently had lunch with the Global eSourcing Manager of a company that now runs almost 10,000 sourcing events each year. About five years ago, the company was using the eSourcing tool of a supply management suite provider to run several thousand events each year to great success and high satisfaction. But, as the group continued to expand its sourcing scope, they become more and more involved in complex sourcing projects that required advanced sourcing capabilities, capabilities that their current tool could not support. These complex events required some serious “heavy lifting” and so, despite their best intentions to aggressively source more, the expansion of their program backfired and they ended up sourcing less. A change was needed – the team had to become faster, but also more agile.
Long story short, they decided to deploy a second tool – an optimization-based sourcing solution and today, they run roughly three thousand events on that tool. But, the overall program benefited as well as the number of sourcing events on the traditional tool tripled to more then six thousand events. This team realized its first eSourcing solution was great but that it could not support some types of events. Rather than trade out that original tool or do anything to disrupt the success of the current program, it stayed nimble and agile and adopted a dual eSourcing tool strategy. This team’s ability to pivot its strategy while in a dead sprint (i.e. high volume sourcing – it was sourcing several thousand events per year) has allowed it source more and source better than most companies in the world. Agility!
This article originally published on June 14, 2013.
Tagged in: Case Study, eSourcing, Process, Sourcing, Strategy, Technology
