There is no denying the power and influence that sourcing managers have today. Organizations are leaning heavily on sourcing teams to keep costs low, value high, and supplier risk even lower. Even sourcing mangers that use top-notch platforms and follow a strict sourcing process can fall short if they are making one (or all) of these critical sourcing mistakes.
Here are the five sourcing mistakes we hear (and see) sourcing managers make – and how to avoid them.
- Inviting suppliers to sourcing events without having any profile data. Every strong sourcing program is built from a solid supplier information program. Don’t invite suppliers to your sourcing events unless you have information that broadens your visibility to make smart sourcing decisions and minimize supply risk. Be sure to collect information through supplier profiles that ask questions pertinent to your line of business and industry. Supplier profiles are also a great place to track information on supplier diversity and other CSR initiatives.
- Failing to bring disparate data together for a holistic view. How do you know which sourcing project to tackle first? Often, the answer is hiding right under your nose! Most organizations have about 5 to 7 systems that they regularly use. These systems are collecting data and intelligence about your organization, suppliers, and opportunities ahead. The best sourcing projects are uncovered when you have the data to support and justify your initiatives.
- Renewing your contract with a sourcing technology provider without doing a market evaluation. Technology is constantly evolving and companies are always changing. Don’t settle! Make sure you do a full market evaluation every 2 to 3 years so you can see what’s new in the marketplace, re-evaluate your goals and requirements, and expand your industry knowledge.
- Overlooking the power of contract management. Nearly every business relationship has a contract at its core. How you manage, track, and report on this contract can determine and directly influence the success or failure of your department. Using contract management, you can better control risk, generate opportunities, and deliver business value. You can gain complete transparency into your contract data and ensure compliance by using a CLM tool. You’ll know when it’s time to source new projects, evaluate suppliers, or even find new suppliers because you have the visibility, reminders, and power to uncover the data within your contracts.
- Forgetting to update key stakeholders on successes and lessons learned. You might not hear this often, but it’s okay to brag about yourself! In moderation and strategically, of course. When you complete successful sourcing projects, you need to let everyone in the organization know! You could even inspire another project with a different business unit. And when projects don’t go as planned, don’t beat yourself up. Always find a way to turn a negative into a positive. Share lessons learned to ensure you don’t repeat your mistakes in the future.
And there you have it- be aware of these mistakes and do your best to avoid them. In the meantime, be sure to share any common mistakes you see happening again and again within your sourcing team. We’d love to learn from you!