Sourcing is a critical part of the procurement process. It involves identifying and selecting suppliers or vendors who can provide the goods or services that a business needs.
However, there is often inconsistency in how sourcing is approached within procurement. Tom Mills, a procurement expert who writes over on Procurement Bites, recently shared his thoughts on how to reimagine the sourcing process in procurement on our Procurement Reimagined Podcast.
Here are four ways to do this.
1 - Build credibility with stakeholders
Procurement professionals should focus on building credibility with stakeholders. This involves creating an objective process that enables stakeholders to make the best decisions.
Tom highlights that Procurement should manage the process and evaluation panel, making sure it is done consistently and transparently.
Procurement should not have a vested interest in scoring the quality of the vendor. They should be there to manage the process and make sure it is done fairly.
2 - Separate procurement from outdated, bureaucratic practices
Procurement professionals should separate procurement from outdated, bureaucratic practices. Procurement should be about securing an objective process that enables stakeholders to make the best decisions.
Tom and I have often talked about this idea of the “Procurement Dinosaur”. Someone who is stuck in the traditional methods of procurement who is not evolving, and they’re effectively one step away from an untimely end.
Procurement can feel rigid at times and we need to break free of that.
Both Hannah and Michelle in previous episodes of Procurement Reimagined advocate a more agile approach to procurement, including sourcing. Elouise Epstein notes that we can turn the RFP on its head and approach sourcing for new tech utilising a MVP method. There are new options to explore when it comes to sourcing approaches.
Procurement should not be a siloed function that tells the business what to do. Instead, it should work with the business to establish what is most important and what risks are involved in each decision.
I know that from talking to Tom numerous times over the last few years, that his ideas around this have parallels around the role of Legal within a business.
Legal must uphold the legal requirements that their role confers on them whilst being the in-house expert on legal matters to steer the business in the best possible direction given the circumstances.
3 - Rely on the expertise of end-users
You should rely on the expertise of end-users when it comes to the sourcing evaluation.
End-users have deep expertise in their areas and can provide valuable insights into which suppliers or vendors are best suited for the goods or services that the business needs.
Work with end-users to identify and select the best suppliers or vendors so that your efforts during the sourcing process have a good outcome.
4 - Reimagine procurement as a more strategic, collaborative function
Procurement professionals should reimagine procurement as a more strategic, collaborative function.
Procurement should be about more than just sourcing.
Procurement should work with the business to develop a framework that enables the business to make the best decisions with all of this in mind - not just cost.
Overall, procurement professionals should focus on:
- Building credibility with stakeholders
- Disassociating themselves from ego-driven decision-making
- Separating procurement from outdated, bureaucratic practices
- Relying on the expertise of end-users
- Reimagining procurement as a more strategic, collaborative function.
By doing so, procurement can become a more effective and valuable part of the business.