For many companies the Sourcing of goods and services is often as far as the procurement process goes, as it’s seen as the focus to get best value, to work with the right suppliers and to ultimately protect the company’s bottom line. It’s definitely a great place to start, however there is also significant value to be gained by effectively managing both contracts and suppliers afterwards.
When done properly Sourcing looks beyond just direct cost savings and quality to deliver other opportunities for savings of cost and time and other less tangible, but equally important benefits e.g. CSR and innovation.
The Sourcing process is not as complicated as it may appear as it’s something that everyone does subconsciously throughout their daily lives to ensure they save time and money and get what’s right for them, e.g. buying a car.
No matter the size of the company, it’s never too early to have a Sourcing process that is simple and objective. It becomes even more important as companies grow and there are more people involved.
The process itself is made up of several clear steps that when done correctly provide consistency, transparency, and visibility of every step in the process. In addition, by having records of sourcing activities it reduces the likelihood of fraud.
The simple steps in the Sourcing process are:
It’s important to remember to get internal stakeholders, such as users and budget holders, involved in the process as they will ultimately determine the success of it.
Many companies going through the sourcing process may choose to remain with their incumbent supplier as they have performed very well in the past and are competitive. Although suppliers may not be too happy about this, they also appreciate that this also benefits them with their own existing customers.
Its good practice to run sourcing activities towards the end of every contract or every couple of years to ensure the continued receipt of best value.
The more visibility and control the company has over the Sourcing process the more likely it is to be successful to save time and money and to work with the right suppliers.
The Sourcing process can either be delivered in-house or by working with specialists, who bring expertise and in-depth sector knowledge.
For many companies, especially larger ones, who have more resources, it’s easier to create Sourcing activities. For those smaller companies with fewer resources, there is one digital Sourcing solution from oboloo that has been designed specifically for SMEs. oboloo is an intuitive and simple cloud-based procurement software solution that also incorporates contract, supplier and savings management to enable companies to be supplier smart. To learn more please visit www.oboloo.com