From pivoting to entirely remote operations to shoring up disrupted supply chains and taking a leading role in business continuity planning, the past year has seen strategic sourcing grappling with uncertainty from all angles. To combat this uncertainty, smart organizations have turned to their sourcing and procurement organizations for guidance on navigating unique challenges and protecting their futures.
Strategic sourcing leaders across all industries have taken these challenges in stride, leveraging technology to stay connected and ensure the business continues to run smoothly despite disruptions. It’s clear that lengthy, manual procurement processes will no longer make the grade amid the rapidly shifting business landscape. As enterprises begin planning for the pivot back to in-office operations, approximately 45% of executives are fast-tracking procurement automation and transformation. By equipping the procurement organization with the necessary tools, businesses can empower their sourcing teams to support key business initiatives like risk management, strategic cost savings, and supplier relationship management.
Technology-enabled sourcing teams are more effective at navigating change and are better equipped to deal with whatever the future brings. Let’s explore the three major advantages of smarter sourcing.
With organizations and business leaders spread across geographies, it’s critical that sourcing teams have a dedicated virtual hub for collaboration within their team and with their stakeholders. Amid ongoing disruptions, businesses need real-time collaboration capabilities to closely monitor and adjust priorities on the fly.
Effective sourcing leaders are also staying tightly aligned with the C-suite by providing up-to-date reporting on cost savings as well as total visibility into project pipeline and spend. As the speed of business increases, executives and stakeholders must have automated analytics and real-time status updates on their urgent projects to make strategic, data-driven decisions.
When executives and key stakeholders have total visibility into procurement processes, sourcing is able to drive exponentially more impact across the entire enterprise. When LendingTree, the largest online lending marketplace in the U.S., prioritized digital acceleration in its procurement organization, the company experienced impressive results, including:
Drastically reduced procurement Service Level Agreements (SLAs).
Nearly tenfold increase in projects completed.
Massive increase in savings booked.
Strategic sourcing teams simply do not have time to hunt down necessary data from disparate spreadsheets and email chains. They need an intuitive single source of truth that centralizes their information and automates cumbersome tasks like data entry, request processing, and project and savings tracking.
Especially during times of uncertainty, sourcing teams need the agility to adapt and move quickly on shifting priorities.
Intuitive technology helps sourcing leaders like Uber’s head of strategic sourcing & supply chain, Brish Bhan Vaidya, dramatically reduce time spent in negotiations while fast-tracking urgent projects. In a Supply Chain Dive report, Vaidya notes that with technology, “a reverse auction takes about 10 to 15 minutes to set up and about 20 minutes to manage” where previously “negotiations could take one or two weeks to complete." By using technology to help automate the auction process, sourcing leaders like Vaidya can dramatically expedite their contract process, freeing up their time for more strategic initiatives.
Disruptions have exposed major gaps in many businesses’ supply chains, and procurement leaders are now tasked with ensuring their strategic partners have stable value chains. According to a Deloitte study, however, approximately 65% of procurement leaders have limited or no visibility beyond their tier 1 suppliers.
To maintain their supply chains and safeguard their businesses from future disruptions, strategic sourcing leaders must have total visibility into their suppliers, as well as mechanisms for feedback and performance evaluations. With the speed of business ever-increasing, sourcing leaders need a way to communicate en masse to their vendor partners and aggregate these responses for strategic decision making. By keeping in constant communication with suppliers, sourcing leaders are better able to understand where potential risks lie.
While we may never be able to truly plan for the unexpected, there are steps strategic sourcing teams can take to ensure they’re prepared for whatever the next normal holds. One thing is clear: The future is in the cloud. Technology-powered sourcing teams are far better positioned to lead their businesses through uncertainty with complete visibility, real-time collaboration, streamlined processes, and data-driven decision making.