Strategic sourcing teams need a place to collaborate with each other and with their stakeholders to align on business continuity planning–from anywhere. They also need a centralized hub for all of their sourcing, contract, and supplier information so they can make data-driven decisions and drive immediate impact across the enterprise.
There’s no denying that the future of the enterprise is in the cloud. As companies expand globally and teams are spread across geographies, they must be equipped with technology that enables them to collaborate and work effectively from anywhere. With the right technology behind them, procurement leaders are mitigating risk to their business, ensuring business continuity, and accelerating their strategic sourcing. As Procurement’s role continues to evolve, strategic sourcing teams are innovating with the business and finding new ways to support enterprise initiatives.
Here are four new ways strategic sourcing teams are supporting the business:
Strategic Cost Savings:
While cost savings is a central function of the procurement organization, sourcing teams now are prioritizing long-term, strategic cash preservation. Procurement teams are examining all contracts to identify areas for savings and are engaging with their suppliers to renegotiate minimums or extend payment terms. To do this efficiently, successful procurement teams in companies like LogMeIn rely on digital solutions that give them complete visibility into their contract terms and obligations.
Procurement leaders are not only looking at existing suppliers and contracts, they are also revisiting their projected spend for future quarters. Successful teams are using technology to dig into their project funnels, timelines, and resources to prioritize their sourcing pipeline. By collaborating closely with their partners in Finance, Sourcing and Procurement are at the forefront of agile operations and future planning.
Procurement teams are instrumental in partnering with strategic suppliers to drive cash preservation, manage spend, and ensure business continuity. Recent uncertainty has emphasized the necessity of strong vendor relationships. By working with their strategic suppliers, procurement teams across all industries have found mutually beneficial solutions for both their suppliers and their business. To support these relationships, successful sourcing teams rely on collaborative solutions to keep them connected to their suppliers and stakeholders.
Top of mind for most strategic sourcing teams is the health of their suppliers’ supply chains. To ensure that their organization is set up for long term success, Sourcing requires visibility beyond their Tier One suppliers in order to make strategic vendor decisions like choosing to partner with international or domestic suppliers.
Product Agility & Innovation:
Procurement’s unique relationship with both suppliers and stakeholders gives them the opportunity to strategically increase the agility of their business’ offerings. By partnering with their strategic suppliers and developing deep relationships, procurement will be better able to leverage their expertise and experience to ensure the business can manage volatile demand.
Strategic sourcing organizations will also be responsible for Supplier-Enabled Innovation (SEI). By contracting with forward-thinking suppliers, sourcing organizations can ensure that their business is using cutting edge technology and products. According to Procurement Leaders, “25%-45% of revenues” come from product innovation and “up to 65% of innovations [are] sourced externally through external partners and suppliers.”
Because of the health crisis, many businesses were forced to rethink operations virtually overnight. As their employees settled into their home offices, companies looked to their procurement teams to ensure that the business was equipped with the right technology and processes to operate remotely. Now, as some regions plan to relax shelter-in-place ordinances and offices begin reopening, businesses are relying on their sourcing teams to ensure that employees are coming back to a safe workplace.
Strategic sourcing teams will play an integral role in supporting smooth business operations. Going forward, procurement teams that align tightly with the C-Suite will be able to prepare for a safe return and ensure business continuity across the enterprise.
Procurement Takes Center Stage
With 75% of businesses experiencing supply chain disruptions, recent events have shone the spotlight on sourcing teams’ unique ability to protect the business and drive enterprise-wide impact. Strategic Sourcing has been propelled to the forefront of the enterprise and technology-enabled procurement leaders around the globe are helping their organizations not only weather current uncertainty, but plan strategically for a better future.
Want to know how you can elevate procurement in your own organization? Schedule a meeting with a Scout expert today and learn how technology can help you and your team drive cost savings, partner with suppliers, encourage innovation, and ensure business continuity.