In this week’s featured webinar, we heard from Ardent Partners Chief Research Officer Andrew Bartolini in an event presented by BravoSolution. Andrew shared a Category Sourcing Scorecard he and his team designed to support sourcing team efforts to build out pipelines that can help allocate team resources and prepare for opportunities.
He demonstrated how the scorecard works during the webinar, running some categories submitted by participants in advance through his Excel based scorecard. You can download the scorecard from BravoSolution’s site free of charge after completing a registration form.
The context of the scorecard draws from much of Ardent Partners’ research. From a CPO’s perspective, savings is still the leading measure of performance and the highest priority. Other objectives are starting to close in, however, particularly as procurement teams set their long term strategy.
Andrew shared some ‘disclaimers’ during the webinar, just to set expectations, about what the scorecard can do. As I have seen firsthand, a tool like this one does not make the process of opportunity assessment EASY, but it can make it POSSIBLE, particularly if you are taking the journey without a consulting or solution partner by your side.
There are two key enablers for this long term planning, and the scorecard functions as a connection between them:
- Collaboration with internal stakeholders and suppliers
- Visibility into spending
Collaboration
As procurement teams look to increase their spend under management and create value beyond cost reduction and avoidance, their relationships in and outside of the company will be critical. Internal collaboration brings access to previously unaddressed spend, visibility into budgets or project timing, and pre-existing ideas for increasing cost efficiency. The same is true with suppliers, particularly as they are able to offer solutions they have seen succeed at other companies or visibility into the market in which they compete.
Visibility
Ideally, procurement teams will want to implement a spend analysis solution, but it is still possible to get some visibility with direct access to data and contracts. As was shared in the webinar, 23% of companies are still doing their spend analysis in Excel. In all companies, but particularly where technology is limited, talent is a key concern for CPOs. Having the right team size with the right capabilities can make or break a well laid strategy.
The scorecard facilitates the process of combining visibility into spend and collaboration with stakeholders and suppliers to objectively prioritize sourcing projects. The greater the lead time on a project, the more likely the procurement team is to be prepared to make the effort a success. By collecting information on approximately 20 questions per category (a.k.a. potential sourcing project) the scorecard will weight and prioritize your opportunities.
As with any tool or solution, what you put in dictates what you get back, and in order to be effective, the 20+ questions are not all easy. The primary purpose of the scorecard is to get you to ask the questions and collect as much information as possible to have meaningful, actionable conversations with executives and colleagues about the potential opportunities and what benefits addressing them may bring.
For more on the scorecard, read Driving Savings: Using The Category Sourcing Scorecard To Build A Smarter, Faster Sourcing Pipeline Using The Category Sourcing Scorecard To Build A Smarter, Faster Sourcing Pipeline on the CPO Rising blog.