In our last post we noted that there’s no single right answer or easy answer here. It’s very situational. We also noted that some consultants will always tell you to start with Sourcing, while others will tell you to always start with Procurement, even though it will often be a chicken and egg situation. You need to score big wins, and that requires Sourcing. But to pick the right categories, you need good data to analyze, and that requires Procurement. But that doesn’t take into account that sometimes the best starting point is SRM or CLM for an organization where the most benefit can come from supplier development (because the organization is locked into strategic suppliers) or CLM (because compliance is key to cost, and brand, control).
So where do you start?
It’s very situational dependent, but your biggest issue should drive it. So if you think your biggest issue is that:
- you can’t do enough sourcing events
start with e-Sourcing
- you’re events are generating limited returns
use decision optimization with extensive models that factor in all known direct & indirect costs and even costs of capital
- you can’t find the right suppliers
start with a modern SRM platform that integrates with a true supplier network for granular supplier discovery that takes a plethora of business needs into account
- you have to (quickly) ensure compliance with a newly introduced regulation
start with a CLM platform with embedded semantic-based / deep learning analytics that can quickly scan thousands upon thousands of contracts and determine those in compliance, those not, and those that need to be manually reviewed (due to the presence of non-standard clauses, enforcements that appear to be country specific, etc.)
- your over-spend, and need for audit recovery, is too high
start with an I2P solution with m-way matching (contract, PO, Goods Receipt, etc.)
- your maverick spend is too high
start with e-Procurement / P2P with an embedded catalog (with visual-guilt driven guided buying), flexible requisition & approval processes, and no-PO / no-Pay enforcement capability
- you need to get your services spend under control
start with a Sourcing platform with a VMS/CWM module or a VMS/CWM solution that can integrate with a BoB S2P solution
- you are unsure of where your best opportunities lie
start with a modern spend analysis solution with integrated prescriptive analytics that can go deeper than just top N
In other words, you let the issues drive the starting point. After all, we all know what happens if you try a big bang implementation and take on the entire extended S2P process at once … the project goes up in a big bang and you risk ending up as one of the top supply chain disasters of all time (especially since everything will need to talk to the ERP)!