What is a Strategic Sourcing Plan and How Can Companies Benefit from It?
Sourcing and procurement have become the most crucial tenet of supply chain operations, leading companies to develop novel strategies, unparalleled initiatives, and data-driven changes within their business plans. Strategic sourcing is one such major change, and involves minimizing supply chain risks, increasing efficiency, and reduce total cost of ownership of products and services. A strategic sourcing plan helps businesses carry out this process, and make these operational changes with efficiency, accuracy, and real-time information, through data procurement and analysis. Organizing data, relevant information, and strategies for an entire supply chain or organization-wide sourcing process can be challenging and complex, leading many companies to make errors, struggle with unnecessary spend, and inhibit growth within the business. A strategic sourcing plan helps efficiently leverage data to make necessary changes to internal operations, address risks, minimize costs, and overcome challenges in a controlled, well-informed, and sustainable manner. There are various substantial benefits to developing and implementing a well-drafted strategic sourcing plan, and companies must leverage these benefits to champion their industry.
How Does a Strategic Sourcing Plan Help IT & Telecom Industry Players?
Cost-Reduction: The IT & telecom industry has witnessed significant change over recent years, including the introduction of remote working, 5G, IIoT, and smart factories, making both IT and telecom services extremely crucial across industries and companies. As demand surges, costs continue to rise and many companies struggle to keep pace with the rapidly expanding market. A strategic sourcing plan helps companies efficiently track, chart, and analyze all expenses and payments, identify the most cost-effective options, and substantially reduce total cost of ownership while investing. These changes combined can help minimize expenses, increase savings, and encourage growth in a controlled, efficient, and sustainable way.
Risk Mitigation: Every market, particularly a rapidly evolving one, is riddled with various risks, challenges, complexities, and obstacles for companies to overcome. Without sound strategic planning, preemptive initiatives, and long-term solutions, companies could easily face various losses, and risk market share in a highly competitive market. When developing a strategic sourcing plan, companies are required to closely assess the market, internal operations, supply chain strengths and weaknesses, and leverage relevant data to develop helpful strategies. As the IT & telecom industry continues to grow, companies can leverage these data-driven and robust plans to stay ahead of the market and mitigate the impact of various industry risks.
Supplier Optimization: Maintaining strong business relationships is an essential tenet of success and efficiency in any industry. As supply chains expand, the role of suppliers and vendors becomes increasingly crucial and failure to optimize supplier performance, relationships, and lead time can significantly impact the business, cause losses, and increase risks. Strategic sourcing plans can provide companies with in-depth insight into internal shortcomings, industry challenges, and potential opportunities for improvement within the supply chain. This data can help increase transparency, improve efficiency, and subsequently enable improved performance and higher expectations from current and potential partners.
Improved Relationships: While supplier optimization is essential to business, the relationship between a company and their vendors can have a major impact on the efficiency, costs, growth, and overall performance. A robust relationship enables mutually beneficial contract terms, fair prices, reduced costs, high-quality products and services, transparency and trust, and in-depth insight into the opportunities for improvement and growth. In the IT & telecom industry, suppliers play a crucial role for companies, particularly when businesses aim to expand operations and increase their supplier base. With a strategic sourcing plan, companies can maintain a clear outline of their objectives, expected plan of action, and upcoming initiatives, providing partners and suppliers with transparency, clarity, real-time data, and the opportunity to grow with the business.
Consistent Improvement: As an industry grows, companies must grow too, and to do so, they require continual reviews, changes, amendments, and improvements across departments and processes. Developing a strategic sourcing plan requires companies to gain a comprehensive insight of their operations, identify shortcomings, and implement meaningful changes to their systems for improved performance. It also encourages consistent reviews, audits, and necessary changes within the industry, providing relevant and real-time information to decision-makers, stakeholders, and CPOs. To succeed in a competitive market, businesses must be open to making changes, addressing challenges, and implementing sustainable improvements to their existent systems.
With the dramatic shifts taking place in the IT & telecom industry, a company struggled to identify and minimize the impact of the major technological evolutions taking place, and witnessed a rapid decline in profitability and efficiency within the supply chain. To identify their shortcomings, and develop a sustainable solution, the IT firm approached SpendEdge, and chose to leverage our expertise in strategic sourcing. Our experts provided the company with in-depth insights into the changes within their market, and helped develop a comprehensive understanding of the impact of various fluctuating dynamics on their business. With this information, and further guidance from our experts, the company identified the need for a robust and unparalleled strategic sourcing plan. The supply chain and sourcing team, leveraged our insights, recommendations, and data, and developed a sustainable, effective, and beneficial plan to achieve and maintain success within the industry.