Tag Archives: BravoSolution

Strategic Sourcing Tech Investment Is The Key To Transformation

Are you running a little late to the digital transformation party? They do say better late than never!

As we’ve explored previously, digital transformation is changing in the world of supplier sourcing.

According to The Hackett Group’s Sourcing Cycle Time and Cost Measurement study, firms are spending around $275,000 a year on software that streamlines sourcing — from supplier discovery, to e-sourcing, to contract lifecycle management (CLM).

So while it’s a sector still driven largely by traditional methods — with their corresponding disadvantages and inefficiencies — companies are starting to see the benefits of a software-driven approach to sourcing.

A little late to the digital transformation party? Perhaps. But better late than never!

Insights into increased efficiency

Respondents report that using supplier-discovery software they can reduce the time it takes to find and qualify a new supplier by 31%. The average time spent doing this the old-fashioned way is in the region of 40 hours. That’s an entire week’s work — and even then the process isn’t fool proof. Around 14% of projects fail to meet expectations, meaning the bidding has to begin again.

Powered by the right software, many time-consuming processes are eliminated. With access to system-recommended suppliers based on predefined criteria, sourcing staff can instantly improve their productivity and speed supplier discovery. On the e-sourcing front, the right tech can reduce total sourcing time by 30%. While CLM software can improve compliance by increasing the use of standard terms and conditions by 38%.

Adapt to succeed

It’s obvious that businesses are seeing benefits. Although that’s not to say new technology adoption isn’t without its own challenges. Processes need to be assessed and adapted, and staff have to learn new ways of working. Cultural change isn’t easy, but it’s one of the hurdles that all firms must clear in pursuit of digital transformation.

In a highly competitive business landscape, it’s vital that your processes enable you to get results quickly and cost-effectively. And this is the bottom line of why organisations need to revisit their approach to strategic sourcing.

A little adjustment today opens the door to far greater efficiency tomorrow.

To discover how your organisation can embrace digital transformation and reduce strategic sourcing costs and cycle times, read The Hackett Group report now.

Sourcing, But Not As We Know It!

How many procurement pros do you need to manage $1 billion of spend? We examine the stats revealing the state of today’s sourcing landscape…

How many staff does it take to make a success of strategic sourcing?

We might not have a definitive answer to that question, but we do have access to some figures that tell us a lot about the state of the sourcing landscape today.

For instance, we know that companies dedicate 16 full-time employees (FTEs) to the sourcing process for every $1 billion in spend. It’s one of those stats that makes you think. At first glance this might sound ok, right? 16 full-time staff can achieve a lot. But $1 billion represents an incredible amount of procurement.

The fact is, most organisations aren’t maximising the value of their purchasing. Efficiency is being compromised, and in this there are a number of factors at play.

Periodic category reviews, while being the best way to ensure effective sourcing, are just not possible for most organisations with the resources available to them. This means companies aren’t adjusting their sourcing to account for changing market conditions.

Compounding the problem, the bulk of sourcing teams’ time – 50 per cent – is swallowed up by the supplier evaluation and negotiation stages, which in some cases can involve highly complex financial and regulatory work. With so much time spent on this phase, more strategic and potentially value-adding phases such as planning – which are still mostly conducted by category managers – don’t get the attention they deserve.

Looking at the landscape as a whole it’s no surprise that most sourcing projects are long and costly, and ultimately don’t deliver the results that stakeholders expect.

Strategic sourcing, it’s a-changing

And automation is the key…

More and more firms are convinced that digital transformation is the answer to increased efficiency in strategic sourcing, and they’re not afraid to invest in software that gives them a procurement advantage. In fact, they spend more than a quarter of a million dollars a year on these solutions. What’s more, they’ve found that this investment is paying off. According to these companies, supplier discovery, e-sourcing and contract lifecycle management software is helping them streamline the entire sourcing process – from discovery to contract signing. As a result, their total sourcing times are being reduced by 30 per cent as are their costs.

This is just the beginning of a trend that holds significant opportunities for organisations. But firms need to be bold in their thinking to achieve these results. Increasing FTEs isn’t the route to increased efficiency. Companies need to look to technology to help them transform their procurement processes and deliver faster, more cost-effective sourcing than ever before.

To discover how your organisation can embrace digital transformation and reduce costs and cycle times by 30 per cent, read The Hackett Group report now.

No More Guessing Games! Time To Use Innovative Data Leveraging

There’s no longer a need for guessing games when it comes to  driving value! Innovative data leveraging is possible in any environment and can help to lead organisations towards an analytics enabled procurement.  

Join BravoSolution’s webinar, Innovative Data Leveraging for Procurement Analysis, which takes place on 28th March.

Many purchasing executives are looking to drive procurement transformation but this is reliant on three major factors:

  1. Level of stakeholder engagement
  2. Ability to align with the overall business strategy
  3. Use of advanced tools and technologies

My research suggests there exists a noticeable gap between procurement executives’ explicit intentions of driving value for the business, and documented results in these three areas.

These gaps can be attributed to a lack of critical data and analytical insight that can support a truly meaningful conversation with the business about spend, supply base, and supplier performance.

Annual budgeting becomes a guessing game, with little input solicited or provided by procurement. It might be due to a lack of data. Or, it could be procurement’s inability to take the lead in order to anticipate and gather the data required. This disconnect is causing significant challenges for businesses.tech

BravoSolution is running a  webinar on the 28th of March, Innovative Data Leveraging for Procurement Analysis.  I will be  discussing a common process that every executive we met with cited as critical for engaging stakeholders and building analytical insight. We call it “innovative data leveraging” (IDL).

Innovative Data Leveraging (IDL)

Innovative data leveraging is a fact-based, data-driven approach to driving change and influencing stakeholders to create procurement value for the business.

The IDL process was described in different contexts, but the common thread was that cross-functional engagement was powered by stakeholder influence through analysis and presentation of data. Of course, leveraging analytics is difficult without some prior investment in procurement systems such as transactional spend analytics, contract management, and supplier performance measurement. However, our analysis also showed that innovative data leveraging is possible in any procurement environment.

The process starts with procurement executives conducting working sessions with business stakeholders to develop a deep understanding of their business strategy, the challenges they face in executing this strategy, and the role that procurement can play in helping to shape and support this strategy. Successful procurement leaders are the ones who can effectively articulate the questions that need to be answered and pursue the data requirements to provide analysis, insight and advice in order to address stakeholders’ business concerns.

Several additional insights emphasize the importance of innovative data leveraging.

  1. IDL was found to be important during any stage of procurement transformation maturity.
  1. The development of IDL capabilities depends on successful initial business engagements, especially when reliable procurement systems and data are lacking.
  1. Advanced analytics in the form of predictive capability is the most highly evolved form of IDL.

What are the benefits of IDL?

At the earliest stages, preliminary insights on spend may provide opportunities for deeper involvement in functional sourcing initiatives, creating a platform for further engagement and integration. In emerging stages, organisations can drive significant insights into total cost of ownership and working capital improvements that go above and beyond simple price leveraging capabilities. In advanced stages, predictive analytics (using both structured and unstructured data) that produce insights into revenue forecasts, supplier risks, emerging market opportunities, and other value drivers begin to emerge.

The innovative data leveraging approach can help organisations at all maturity levels to build a solid path towards an analytics-enabled procurement, in their pursuit of value and excellence. This does more than bridge the gap between procurement’s goals and the overall business strategy.

When you start by leveraging data analytics, no matter what stage your organisation is in, you can build a foundation for innovative capabilities for procurement excellence, like predictive analytics and cognitive computing.

You’ll  learn more about all of these issues in BravoSolution’s  upcoming webinar!

Sign up to join BravoSolution’s webinar, Innovative Data Leveraging for Procurement Analysis, on 28th March