Building a Sourcing Pipeline: 8 Questions to Ask When Evaluating eSourcing Providers

Are you asking the right questions when you’re evaluating eSourcing providers?

Andrew Bartolini of CPO Rising recently published an article entitled “Building the First Sourcing Pipeline – Getting Started.” He provides valuable advice to procurement organizations that have just purchased an eSourcing solution. These organizations should be commended for the decision to become more strategic by implementing tools that will (hopefully) streamline their sourcing processes and vault their positions within their companies.

However, from one solution provider’s point of view – I ply my trade in sales operations and analytics – a couple of statements really stick out to me. First, let’s take a step back, before the solution purchase is made. Bartolini states, “Ok, now what? […] Time to start building a sourcing pipeline.” I say, it’s time to ask providers whether they can actually help you build this pipeline.

Andrew’s viewpoint is that “The development of a sourcing pipeline remains one of the most important activities for any procurement organization. And yet, even mature organizations struggle to develop and maintain them.” Perhaps these procurement teams haven’t considered whether the solutions they’ve chosen will enable the users to cultivate the pipeline. Andrew goes on to give advice on where to start the building. I think it can save you a lot of future pain if you consider these same points as you are evaluating providers. You want your eventual provider to reduce pain in these areas, to streamline these tasks and decrease workload. A good eSourcing provider will ensure high user adoption and pipeline maintenance.

Let’s take a look at his points through the lens of the evaluation stage:

  1. Start with your spend. Spend should not be viewed in isolation. Spend visibility is not spend analysis, and opportunity assessment through spend alone won’t take you very far. You can pick off some low-hanging fruit, but that’s about it.

Consider asking the following questions:

  • Will the provider be able to relate spend data to contract data, performance data, sourcing data, and other enrichment data for holistic opportunity identification?
  • Will this data be captured all in the same place?
  1. Get a list of “usual suspect” categories. A good provider will offer guidance on these types of categories and should provide historical data points.

Consider asking the following questions:

  • Will this information be integrated into the spend reporting and configured to your own sourcing groups / categories?
  • Does the analysis take into account custom taxonomy?
  • Will this data be in the hands of your team, or must you rely on contacting the consultants from the provider?
  1. Ask your team. What’s important to procurement teams today? Collaboration.

Consider asking the following questions:

  • Does the tool make collaboration easy amongst global teams?
  • Is it easy to get feedback and gather opinion? Another hallmark of high adoption is ease of use. The tool (and provider) should be focused on making the team’s jobs easier so they can add the most value to the company.
  1. Ask the budget holders. Collaboration and intelligence become increasingly important as you get to the budget holders.

Consider asking the following question:

  • Will the tool be able to provide intelligence for forecasting, budgeting, tracking savings, etc. that will flow down the line and enable intelligent pipeline construction? If so, procurement will become even more strategic in the organization.

Whether you’re ready to build your first sourcing pipeline or maintain and streamline your current sourcing process, I hope you find these tips helpful. In the meantime, do you have any tips or best practices of your own? Feel free to comment below or tweet us at @iasta.

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