Strategic Sourcing Solutions

Strategic sourcing is a series of collaborative procurement processes that includes spend data collection and analysis; supplier management and category management; sourcing; and contract management. Strategic sourcing solutions are available in application suites as integrated solutions that help procurement professionals and organizations:

• Understand detailed spend profiles

• Discover the right savings opportunities

• Identify, onboard, and perform continuous management, evaluation, and qualification of suppliers to help support diversity, sustainability, cost reduction, and reliability objectives in today’s volatile marketplace

• Execute all negotiation activities and tasks, from tendering to contract negotiation, enabling compliance and collaboration among multiple company stakeholders, delivering sustainable savings, and reducing supply chain risk

• Operationalize negotiated agreements, helping ensure a consistent realization of their value

Strategic sourcing is important because its processes and capabilities help organizations increase compliant spend, achieve significant cost savings, and drive strategic value across the enterprise.

The difference between purchasing and strategic sourcing is that purchasing is a business process that organizations use to acquire essential products and services in a timely, cost-effective way, while strategic sourcing takes a more holistic approach that involves collecting data, analyzing costing and prices, collaborating deeply with suppliers, conducting market research, and negotiating competitively priced contracts.

Purchasing focuses on obtaining goods at the lowest price, often by maximizing order quantity and discounts. Strategic sourcing seeks to create better procurement efficiency, minimize supplier risk, increase compliant spend, and achieve significant cost savings.

The difference between sourcing and strategic sourcing is that, while sourcing is a tactical, transactional activity driven by near-term, specific requisition needs, strategic sourcing addresses the holistic sourcing needs of an organization using processes such as data collection and analysis, category management, and supplier discovery and evaluation, including tendering and contract management activities.

As a result, strategic sourcing can better help organizations identify cost-cutting opportunities; define and execute supplier selection processes; analyze supplier responses; and negotiate competitively priced contracts.

Strategic sourcing can be improved by using solutions that help organizations:

• Understand detailed spend for everyday expenses

• Gain access to a reliable global network of suppliers

• Identify and qualify suppliers that can effectively support diversity, sustainability, cost efficiencies and, most importantly, reliability

• Develop a strategic sourcing program, including new supplier information and appropriate onboarding processes to help organizations find high-performing suppliers

• Support process and category best practices with knowledgeable resources

• Enable confident sourcing with proper market, commodity, operational, and contractual information

• Support quick, straightforward access to strategy and category expertise, helping organizations realize greater value in everyday procurement operations