"Smart sourcing" is not just for procurement. The approach can generate value that positively impacts every corner of the organization. From sales and finance to operations and marketing, sourcing can help every department grow and reach their goals.
Stakeholders without a procurement background may not fully understand at first how valuable sourcing can be, but its role in areas like finance, risk management, customer satisfaction and brand reputation can reap tremendous rewards when implemented throughout the entire business. Which areas have the greatest potential?
Finance: the foundation for the future
Sourcing is an incredibly effective way to improve your organization’s bottom line. Think more savings, new revenue and unlocked working capital. By taking suppliers to auction on a regular basis, teams secure fair pricing, and can often end up getting a better deal on key supply sources. It seems simple: by driving costs down, profitability goes up, but these benefits must be sustained, measured and optimized over time in order to see real financial gains.
Key metrics to track include total cost of ownership (TCO), cost avoidance and company valuation. Sourcing complex categories like OpEx and CapEx, focusing on TCO, and understanding how these purchases truly impact the bottom line helps drive stronger, more sustainable results. Ultimately, this financial impact will shape the growth and direction of the organization.