Sourcing Change Management

During the interview process with analysts that have applied for positions at Source One, I always ask candidates what they see as the most difficult part of the job they are applying for.  I get a diverse range of answers, sometimes they say market research, sometimes analytics, sometimes negotiating with suppliers and identifying savings opportunities.  Rarely does an analyst really know what they are in for with this job – all of those things are truly the easy part.  They are easy because they are controllable, they are easy because most markets have capacity and competition, they are easy because no matter how good you buy, you rarely get the absolute lowest price available. 

As any good senior sourcing person will tell you, the hardest part of the job is not identifying opportunities for savings.  The hardest part of the job is getting the business – your own company (or in our case client) to participate in the process and accept and implement the savings opportunities that are identified.

For Source One, you might think this is counter-intuitive.  Clients hire us specifically to help them obtain cost savings through the strategic sourcing process.  If they hired us, they obviously want cost savings and have the intention to support the process.  And this normally the case, at least for the people who bring us into the engagement.  But most of these sponsors are not under the illusion that their team has already exhausted all options for savings and need additional support to identified new areas of opportunity. Most of them realize that their team could surely do more than they are right now, but don’t simply because they lack the internal political capital to get the departments they support to accept their help and utilize their expertise to drive organizational savings.

They are tired of dealing with roadblocks, circular logic, and meetings that rehash projects from years ago, and have brought in Source One to challenge the status quo. 

We have a slide that we use during a kickoff with a new client that is titled “Inhibitors to Success”.  On this slide, we list out different statements or thoughts stakeholders may have when sourcing engages them to support a cost savings initiative.  These statements include “We’ve already tried that, it didn’t work”, “I don’t have time for this project”, “We have special requirements”, “Our supplier is giving us the lowest price” and “We’re already doing that”. 

When we show this slide to our sponsor, they almost always laugh because they have heard these excuses before.  Our goal in reviewing it with stakeholders, of course, is to show them we understand their concerns and highlight that none of them are unusual.  Normally this gets a conversation started that helps us get past initial reluctance and into a more collaborative space.  But not always.  Engineering groups, marketing departments, IT and HR all still find ways to push back.  For us, even purchasing and sourcing groups will try to passively or actively resist the goals and objectives of the initiative, because if it’s not their idea, then they don’t get credit for it.

So as we continue to debate the future of procurement, the diminishing returns of strategic sourcing, and the next big thing that is going to replace it, keep in mind that in most organizations the dysfunction still exists.  There is a lot more work that needs to be done from an organizational and cultural perspective before we can say that sourcing is an outdated process.  Sourcing still has a long way to go.