Manufacturers utilizing manual processes to source the direct materials that comprise their products have an extraordinary opportunity to leverage automation and drive great value across the enterprise. And yet, while the value proposition of an eSourcing solution is straightforward, articulating and presenting a business case for a solution can be complex, time-consuming, and difficult. To help procurement and sourcing executives and their teams accelerate this process, Ardent Partners has developed a robust “Business Case Framework” that includes eSourcing specific content, independent research, and easy-to-follow directions. Click here to read last week’s introduction.
Executive Summary
INSTRUCTIONS: The Executive Summary should provide an overview of the key points of the Business Case and outline the purpose of the eSourcing project. The Executive Summary should also contain a summary of the issues being addressed by the project, what benefits it will provide, and how it aligns with the goals and objectives of the organization.
Plainly stated, the manual sourcing process currently utilized by our sourcing team today limits our ability to increase the volume of direct materials that is competitively sourced, collaborate with internal stakeholders, identify the highest-value suppliers, track compliance, and ultimately, drive savings. This business case describes the current challenges caused by our manual sourcing process and presents the argument that an investment in an eSourcing solution will enable a business and process transformation that will generate significant, sustainable benefits and a fast return on investment.
Solution: The deployment of an eSourcing solution will automate the supplier negotiation process and enable a collaborative work environment for project teams to identify and evaluate qualified suppliers and award optimal contracts to them based upon robust quantitative and qualitative analysis. eSourcing solutions are among the most powerful supply management solutions available today and offer compelling ROIs when compared to other enterprise-level applications. Price discovery, process efficiencies, bid evaluation analysis and optimization, and improved stakeholder visibility and collaboration are among the primary benefits that eSourcing delivers to enterprises in the manufacturing industry. Based upon significant internal analysis of our current performance, we are confident that this case for an eSourcing solution will deliver a compelling return on investment with minimal risk.
Risks: The primary risks for any eSourcing project are related to technology selection and user adoption. These risks can be mitigated by the usage of third-party research tools to identify the best solution, the early involvement of key project stakeholders, and strong/visible support from the executive team. The financial and business benefits from this project far outweigh these risks.
Based upon our Return on Investment (ROI) assessment that uses conservative assumptions, the project payback period is ___ months and a three-year ROI from this project is approximately %.
