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The State of Strategic Sourcing 2014 – Part II

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In the previous blog, I discussed the changing landscape of sourcing organizations.

In this blog, my focus will be on top strategies to improve sourcing performance and challenges to achieve sourcing success.

State of Strategic Sourcing-Part 2

The top most strategy voted to improve sourcing performance is COLLABORATION.

As shown in the graph below, 53% of procurement departments are focused on improving the level of collaboration that they have with the line-of-business leaders that control budgets. Gaining influence over spend and sourcing projects can be driven via executive mandates and governance policies, but the ideal sourcing situation is when the business pushes projects for procurement to manage instead of procurement pulling control from the grasp of business leaders.

46% of all sourcing teams have a focus on improving supplier collaboration over the next 12 months. The underlying reasons why they are doing so are manifold. Some are linked to the maturation of trading partners who now understand that “going it alone” is a strategy that dooms many to failure. As the sourcing picture continues to expand, suppliers have become another critical dot in the frame.

Another 41% of sourcing leaders plan to improve the way that their teams and enterprise use technology. This can mean either an investment in new solutions like spend analysis and supplier performance management or the optimization of the automation tools currently in place. Technology tools, like eSourcing, can be what makes sourcing a more strategic business process and, when fully-leveraged, can be true enablers for greater sourcing effectiveness.

State of strategic sourcing

Challenges to successful sourcing are: 

Even though most sourcing professional have found effective ways to deal with business pressures, many challenges still persist.

  • 60% of respondents indicated that they remain hamstrung by staff or talent constraints. Many sourcing teams’ skill levels are still average or below average (as judged by the CPOs) across multiple sourcing skill sets.
  • Lack of engagement with budget-holders and line-of-business is another critical challenge
  • 30% of respondents cited budget constraints while another 30% cited “lack of technology” as an hurdle to achieve sourcing success.

Stay with us as in the next blog I explore the new definition of strategic sourcing.

For detailed reading you can access the complete Ardent Partners report on The State of Strategic Sourcing by clicking on the download button below.

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