Source-to-Contract: Key questions for transformation
Do you have an intuition that your organization may be losing time, money and talent in the way it sources suppliers, manages them and takes care of contracts? If so, then here's a simple way to check whether your instincts are correct and recognize the implications.
The Source-to-Contract process
, which combines sourcing, supplier management, content management and contract management, is a delicate balancing act.
On the one hand, you need to ensure your enterprise gets the best value from the goods and services you buy from qualified suppliers and approved contracts, obtained using the most appropriate types of sourcing events.
On the other hand, decisions must be weighed against a range of important factors, such as whether the supplier is compliant and meeting performance standards and has the most up-to-date credentials. Unless the answer to these is 'Yes', then there's the risk of disruption, expense and reputational damage.
But the Source-to-Contract process is more complicated - and never ending. Procurement teams need to rationalize their supplier base to better leverage spend (possibly recruit new suppliers where there is limited coverage), retest the market routinely and identify qualified suppliers quickly when new needs arise. Supplier contracts must be monitored continuously. And all the whilst, relationships with key suppliers need to be developed, maintained and strengthened.
Put simply, the sheer ground that Procurement teams need to cover with Source-to-Contract often means that something, somewhere gets overlooked. Time, money and talent is wasted when failures occur, and there's often extra cost attached to putting things right.