I’ve just returned from the Gartner Sourcing, Procurement, Vendor & Asset Management Summit, held in Orlando, FL. A three-day event, this year’s Gartner Sourcing Summit brought together two adjacent, but often overlapping communities – IT and Procurement.
The 1,500 delegates in attendance created a dynamic conversation that covered a broad range of topics, and I personally had the chance to talk to forward-thinking sourcing and procurement leaders who were tackling some tough initiatives around team development, measurement, and business alignment. What struck me was how common these challenges were – across industries, geographies, and company sizes.
Gartner Sourcing Summit: Three Key Areas of Focus to Build Better Business Rapport
From in-depth sessions with analysts like Luke Ellery, Yanni Karalis, and Edward Weinstein, and from the hallway and mealtime conversations, you could consistently hear three critical conversations happening across the sourcing community. It’s clear that by focusing in these areas, you and your team can make major strides towards building a better rapport (and perceived value) with your business stakeholders.
Here are those critical conversations from the Gartner Sourcing Summit 2018:
- Finding better ways to measure the value of sourcing
- Developing new skills (and career paths) for procurement
- Not just measuring performance, but engaging with suppliers
To measure the value of sourcing, we need to expand the metrics we manage.
Multiple sessions touched on this topic, and it’s a theme we cover with our customers on a daily basis. The headline here is that forward-thinking procurement and IT leaders are actively seeking guidance to transform the way they work.
While every speaker cautioned that “moving beyond” cost savings did not mean “leaving behind” this critical measure of success, they all challenged attendees to look for metrics that paint a fuller picture of the value Sourcing brings to the business.
By looking at three areas of impact, financial performance, operational metrics, and efficiency measures, leaders can build a much stronger business case for their team and future investment. As we’ve shared before on the Finance side, leading organizations are not just tracking cost avoidance, but using more modern tools to track savings and align on specific financial targets in partnership with the CFO’s office. This allows for a much cleaner conversation about how Sourcing is driving re-investment in the business.
Beyond savings, the two metrics that jumped out to me as the most useful are procurement cycle time (an operational metric) and a measure of spend or projects per FTE (an efficiency KPI). Together, these two can give that complete picture of the impact your team can have.
As our businesses evolve, we have to invest in our team’s skills and careers
Yanni Karalis, Research Director in Gartner’s IT Procurement, Asset and Vendor Management team, had a few of my favorite quotes from the event. Most notably, he focused on the impact that employee learning and growth can have on the entire organization.
“The skills we are developing as sourcing and procurement departments,” he said, “are valuable in almost every department in our organizations. We can create value by giving talent back to the organization.” I think this is true both ways. In sourcing, you learn not only core skills like negotiation, research, and program management, but also storytelling, product positioning, and market insights, valuable to the whole organization. And as a result, this makes our teams desirable for career growth, as well as for talent dissemination.
“We can create value by giving talent back to the organization.”
– Yanni Karalis, Gartner
By “showing that we know how to grow talent,” Yanni concluded, we demonstrate how valuable strategic sourcing can be to a growing company.
Vendor Performance Management is evolving rapidly into Supplier Engagement
This final conversation seems to have grown organically out of the intersection between the Sourcing and the IT audiences at the event. At this fulcrum point rests Vendor Management, and they are looking to drive a similar transformation to the one occurring in Sourcing.
Ultimately, every session I attended in this track arrived at a set of similar conclusions: We have to move away from a management strategy based on purely operational and performance KPIs. Certainly, this objective way of measuring delivery is still an important component, but the teams who also measure alignment to business objectives, relationship quality, and innovation are able to keep ahead of the market more effectively.
This is a trend we’re seeing, too. The field of supplier performance management is rapidly evolving, and companies need new, more flexible tools to tackle the challenge. And it’s not just the ability to survey and measure – the most important capability in this process is how we engage and collaborate with our key vendors. That’s why we’re making it easier to communicate 1:1 with suppliers, establish joint action plans, and track progress against those milestones.
I’m already looking forward to next year’s event in Texas. Were you at the Gartner Sourcing Summit this year? If so, and I missed you, would love to connect here and talk more about your observations.