Today marks the “official” release date for our book, Managing Indirect Spend – Enhancing Profitability Through Strategic Sourcing. The book was a nearly two year effort, led by myself and Bill Dorn, and includes content, insight and contributions from many other team members at Source One. I am proud of this book and glad I had a hand in writing it.

Whenever I talk to anyone in the industry about the book, the first question I get asked is “Why did you write it?” As consultants that focus on strategic sourcing, ultimately our experience working with customers, gaining an understanding of the differences between organizational cultures, and how advanced companies are (or aren’t) in strategic cost reduction for indirect spend categories is what led us to writing this book.

In most mid-sized and many large companies, people with backgrounds in Marketing, HR or IT have control of budgets in the millions or tens of millions of dollars and no experience or training in strategic sourcing and negotiations. This book was written with them in mind.

This book was also written for the person in Finance or the C-Suite that has been tasked with getting control of costs for indirect spend categories, without being given the resources or tools to do so properly.

We know, based on our experience, that strategic sourcing is a powerful tool that can be used to reduce costs for indirect spend. We also know that there is a fundamental misunderstanding between what strategic sourcing is currently defined as, and what it should be. Strategic sourcing is not using eRFX software to run a bid for janitorial services. It is not simply leveraging the aggregate volume of office supplies across multiple locations to gain price concessions from an incumbent. Strategic sourcing is a process that includes aspects of project management, change management, and ongoing supplier management to ensure savings identified become savings achieved.

I often tell our customers that finding savings is the easiest part of indirect spend strategic sourcing. The process is solid, market competition exists and if the spend has not been managed before, you can probably find a better price out there. The biggest challenge is getting the internal consensus to allow you to act in the own best interests of your company.

We hope you find our book to be a useful resource in overcoming this challenge and effectively manage your indirect spend categories.
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Joe Payne

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