Legacy tools are near obsolete as procurement teams seek automated sourcing solutions that allow for collaboration and real-time transparency to garner better results. In fact, according to Deloitte’s 2018 Global CPO Survey, 61% of procurement leaders delivered better year-over-year savings performance than last year after implementing automated sourcing tools.
However, it has been difficult for CPOs to find the tools needed for their team to maximize results. The market is crowded with e-sourcing solutions focused on procurement teams’ challenges. What is most important for the CPO and transformation of their organization? The CPOs must first consider what decision best aligns with the overall global business strategy, then look to see how that strategy will impact procurement. Here are three ways CPOs can future-proof decision making and align the sourcing technology in their business strategy to propel the company forward.
Simplicity drives collaboration
It is critical for sourcing teams to find ways to create strategic impact for their business beyond cost savings to drive competitive advantage. The right modern e-sourcing tools can drive greater collaboration within your team, finance, and with stakeholders, furthering sourcing’s impact in the company. A study by McKinsey & Company states that when teams implement a collaborative process and tools into their strategy, their productivity rises by 20-30%. This productivity boost, in turn, increases the likelihood of positive financial results for the company.
LendingTree, America’s largest online lending marketplace, realized they needed to adapt and evolve to effectively support the business as the company continued to hyper-scale. They began their search for a modern e-sourcing tool with two key aspects top of mind: simplicity and efficiency. Once they implemented their chosen tool, communication across all levels — from sourcing professionals to executives — increased significantly. LendingTree found the chat and workdesk function particularly helpful for fostering collaboration. It allowed them to quickly address issues or pass along information that might need approval, rather than waiting hours or days for emails to be answered.
Push for stakeholder engagement
Once effective collaboration channels are in place, CPOs should begin to push for greater stakeholder engagement with the sourcing process. With an increased emphasis on stakeholder engagement, business goals and outcomes will be better aligned across the enterprise. And it goes without saying that when the whole business is driving toward the same goals, the collective momentum can be game-changing. In addition to greater business impact, increased engagement will raise productivity levels and help businesses brace for unpredictable circumstances.
Using modern sourcing tools that emphasize visibility allows teams to manage every aspect of a sourcing event from beginning to end. It also gives stakeholders and finance a real-time view of a project’s status and lets them see immediate results from sourcing. Giving stakeholders and finance better visibility is critical for success because, when they have a comprehensive view of sourcing outcomes and processes, they are certain to be more engaged.
Harness the power of data
While increased collaboration and better stakeholder engagement are imperative in aligning sourcing tools with overarching business strategies, neither will be truly transformational unless sourcing teams can utilize the power of data. The best procurement teams consolidate all information into a single e-sourcing tool that can also pull up-to-date insights from the data that is collected. This ability allows CPOs to report metrics to finance and internal stakeholders more effectively, showing the impact of the team and projects. Centralized data was another key characteristic LendingTree prioritized in the search for a new sourcing tool. With data in a central location, LendingTree significantly improved reporting by cutting out time-consuming manual data aggregation processes.
Collaboration, stakeholder engagement, and data awareness may seem like long-reaching goals to achieve for your sourcing team, but aligning goals with the right tools will lead the entire company to success. Now, factor in increased market volatility and other unpredictable external factors, and you’re left with the forgone outcome that businesses can’t afford to be working with disconnected and legacy tools. The entire business must be completely aligned and driving towards a common vision to strategically navigate and outpace the competition.