What is strategic sourcing?
Strategic sourcing is a process that creates efficiencies across all spend categories, minimises supply risks with improved supplier selection, and gives visibility into pricing and forecasting.
The four steps of strategic sourcing
Strategic sourcing is a procurement process that connects data collection, spend analysis, market research, negotiation, and contracting. It stops short of the actual purchase of and payment for goods and services.
Strategic sourcing can be customised to meet a customer’s specific needs, but its main goal is to leverage a single, integrated system to enhance profitability.
Strategic sourcing best practices include digitising documents, participating in a digital business network, and automating workflows. The process can be broken down into four steps:
- Data collection and spend analysis: Spend analysis concentrates supplier data into one source, letting organisations know exactly what’s being spent where and presenting the opportunity to streamline vendors.
- Supplier discovery and RFx: Sourcing becomes a strategic advantage when organisations can access supplier data through a digital business network, allowing them to request RFPs and have suppliers compete for their business.
- Negotiations and contracting: Automated tools can speed workflows, simplify the digital signature process, and create an electronic repository of contracts where organisations can set renewal alerts.
- Implementation and optimisation: When sourcing is automated and digitised, organisations can move faster, build in feedback loops for continual optimisation, and constantly evaluate suppliers to make sure they're getting the best sourcing agreements possible.
Strategic sourcing software paired with a digital business network increases efficiencies, minimises supply risks, and achieves cost savings.
Benefits of strategic sourcing
Digitalised strategic sourcing makes buying easier
Manually managing sourcing with spreadsheets can open gaps in the process, leading to a high risk for error and reduced visibility. Digitalisation through a single sourcing platform minimises risk, creates cost savings, streamlines processes, and gives all stakeholders the improved visibility needed to ensure suppliers meet quality, compliance, and cost expectations.
Create a seamless strategic sourcing experience from start to finish
Automated and digitised sourcing helps select the right suppliers and negotiate the best deals, faster.
- Aggregate and classify every purchase
- Standardise source-to-contract processes
- Free people up for even more strategic work
- Identify new savings opportunities
- Drive materials cost savings and optimisation across all spend categories
- Increase speed and drive up throughput across teams
- Find better suppliers and innovation partners
- Easily connect buyers and suppliers to make complex processes easier
Explore solutions for strategic sourcing
Improve your source-to-contract cycle time and material costs.
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