As we noted when we discussed this topic seven years ago, if you want a successful event that generates significant savings, you have to select the right category — and the best way to do that was often to evaluating them with the right scorecards that could predict savings opportunity.
But success requires more than just selecting the right category, it also requires executing a successful event, and this requires:
- selecting the right sourcing event and
- adapting quickly if market conditions change
However, today, to be successful, a sourcing scorecard is more than just a point-in-time snapshot of market factors, buying factors, supplier factors, internal factors, and category-specific factors. It’s historical data, even if anonymized, on past events with respect to size, savings, geography thereof, relevant market conditions, and event type.
This way a buyer not only knows the potential savings associated with a category at a particular time, but what type of event will be needed, and what market conditions need to hold throughout the event to maximize the chance of success. And if there are good projections as to how long conditions will hold, the buyer knows how long he or she has, or doesn’t have, to complete the event to maximize chances of success. And if conditions change unexpectedly, the buyer can halt the event and decide what to do next.
Plus, sometimes you can’t just select the category with the greatest sourcing potential, you have to select the category where the contract is going to expire in 60 days and you can’t be without a contract or risk a production line shutdown. Even if the market conditions are the opposite of what you’d need for best results, you still have to proceed — so having the best information possible on the option likely to give the least unsatisfactory outcome is still a positive. And having a platform that can use a modern category sourcing scorecard to enable the right workflows to drive the right events is most likely to minimize a less-than-ideal event as well as maximize an ideal event when it comes.