SOURCING – a strategic role in co-creating value

Sourcing & Procurement are becoming more and more a strategic functions to co-creating value at lower waste and more sustainably.

Sourcing is changing face. In a world of global mobility, where more of everything is required, Sourcing needs to be a true strategic partner for creating more value, at lower waste, and sustainably. Faster and more effective go-to-market strategies driven by visionary leadership can enable this shift. Sourcing in the 21-st century is shifting from a transactional function-oriented towards cost-cutting to a value-creating function supporting, enabling, and fuelling the innovation agenda of the organizations.

In commercial organisations, Sourcing and Selling are 2 sides of the same medal.

Key questions raised today by the organizations in their efforts to making sourcing more effective, often concern:

Our long-term hands-on and advisory involvement both with the commercial and the sourcing organizations indicates that building any strategic capabilities is closely related to the strategic agenda of an organisation and the mastery of industry and market dynamics.

To upgrade Sourcing to a strategic function the strategic agenda of an organization need to shift from handling sourcing and procurement as a transactional function to seeing it as a transformational function. Seeing the transformational impact of sourcing and capturing it in an organization’s business model is the hallmark of making sourcing strategic. E.g. the ESG agenda can be considered as a compliance exercise or a transformational and
value creation exercise. How organizations identify the strategic potential depends on their leaders and their collective vision of where they want to take their business next.

To make of Sourcing a strategic function you also need to develop internal competencies such as

Making Sourcing a strategic function is undeniably a change that shall be led and managed as such. Often leaders mistake this for a day-to-day activity. But leading such repositioning disturbs structures and established power and decision-making constellations which hugely impact the scope and speed of change.

To shape up sourcing agenda leaders need to invest in team up-skilling, particularly contract management and negotiation skills; technology enablement, particularly collaborative technologies; and change capabilities, particularly in developing agile and response-able culture. And above all in creating inner and outer alliances that gauge the strategic power of sourcing in the 21 st century.

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