Service Leaders Speak: Kris Colby of Ariba on “Time for Sourcing 3.0”

Today’s post is from Kris Colby of Ariba.

In keeping with the Back to School season, best-in-class Sourcingprofessionals are quickly realizing that they need to move into”advanced placement” classes if they’re going to stay ahead of thecompetition. Doing so requires embracing a new definition ofworld-class sourcing capabilities and adopting the tools and processesnecessary to deliver them.

Over the past 20 years, the Sourcing discipline has seen two periods ofdramatic evolution. First was the widespread application of StrategicSourcing practices starting in the late 80s which instituted a rigorousand prescriptive approach to what had frequently been a less scientific,ad-hoc and back-office activity. Second was the introduction of new technologies such as e-Sourcing, starting around 2000, that enabled increased competition, transparency and efficiency. While each of these developments brought substantial improvements in both efficiency and effectiveness to the world of sourcing, they were limited in their ability to access external resources, content and expertise. This in turn limited the knowledge and capability of an organization to what was housed inside the four walls, plus what was picked up at the sporadic trade conference.

The next wave in Sourcing (conveniently labeled Sourcing 3.0) buildsupon the process developments of Strategic Sourcing (Sourcing 1.0) andthe technology enablements of e-Sourcing (Sourcing 2.0) by adding twocomponents always in short supply but critical to maximizing results:Agility and Information.

Agility: With the over-used “do more with less” mantra only acceleratedby the recent economic downturn, it’s increasingly difficult to supportkeeping in-house a host of different resources that, while valuable, mayonly be needed sporadically. Instead, organizations need to be able tohave “on-demand” access to additional resources (human, knowledge andtechnological) to deal with new categories, event-driven projects,spikes in workload, and internal knowledge gaps. By maintainingcost-effective access to the incremental help your organization needs,you can have the tools you want at the price you need.

Information: The dramatic swings in most commodity markets over thelast twelve-plus months are only the most visible reminder that all thetechnology and process in the world is no match for understanding wherea market is going. Rather than quarterly market reports that areout-dated before their ink is dry, Sourcing Professionals need to tapinto the many online resources available to track markets, get strategyadvice, find new suppliers, and generally stay on top of things. Thesecan range from standard commodity market trackers (e.g Chemdata) toonline professional communities (Linked-In) and broader networks fordiscovery (e.g Ariba Supplier Network). This information enablesdifferent strategic approaches to categories, stakeholders and supplybases.

Combining this on-demand access to both information and agile resourceswith their existing capabilities in both technology and process,best-in-class sourcing organizations can create the opportunity to driveadditional value on every project and maintain their lead over the competition.

Thanks, Kris!

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