The Art of Sourcing

Last March, McCoy hosted a webinar called ‘The Art of Sourcing’. This webinar focused on the sourcing trends and how SAP Ariba, as a platform, can facilitate those trends. Our guest speaker, an expert in the field of strategic procurement and procurement digitization, started off with the trends he sees evolving in the sourcing process while the speaker from McCoy elaborated on how these trends are reflected in the functionality and upcoming releases of SAP Ariba.

1. Segregating Operational Sourcing from Strategic Sourcing

In the past, Category Managers were often busier with the day-to-day operational activities than focusing on the strategic tasks. As a result, there was little to no time left to save money by making different strategic decisions or by sourcing new suppliers. However, currently the procurement world is making a shift to involve support from for example operational excellence centers across the globe. This requires any procurement platform to be able to assign tasks automatically to different people in the procurement process. 

SAP Ariba is one of the platforms which facilitates this trend by (automatically) assigning sourcing tasks to different users in the system. In SAP Ariba, you can set up templates in which you define the different phase of each sourcing project. Each phase contains one or more tasks which are automatically assigned to the correct users or user groups. This includes To Do, Notification, Review and Approval tasks. As a result, the Category Buyer is not the executioner of all the tasks in his/her sourcing project. Some tasks can be assigned to an operational support center or even the legal department. 

Below an example of a task set-up:

Procurement Operations Desk for Sourcing Solutions

SAP Ariba also offers the capability of the Sourcing Operations Desk. The operations desk capability in SAP Ariba Sourcing helps operational sourcing agents to manage their tasks associated with multiple sourcing projects and sourcing requests on a single dashboard view. Tasks associated with sourcing projects and sourcing requests in SAP Ariba Sourcing are routed to procurement operations desk and automatically assigned to the appropriate users.

Users assigned as Sourcing Operations Desk agents can view and organize their tasks on the Operations Desk dashboard and open the tasks for further processing in SAP Ariba Sourcing. At any point, users designated as procurement operations desk managers can monitor the status of the tasks to take timely actions, such as assigning users for any unassigned tasks and viewing the status of the in-progress tasks to assess the state of the tasks and the task distribution of their teams.

2. Standardizing Sourcing

Previously, Sourcing could be viewed as a black box in which all category buyers had their own way of working. One of the biggest issues with that way of working was that the quality of the sourcing activities was different per project and/or buyer and a central repository was non-existent. Nowadays, the adoption of sourcing policies and standardized templates ensures that sourcing projects are getting more structured and transparent, leading to a more efficient and compliant procurement process.

When making use of the standardized templates in SAP Ariba, each sourcing project is structured in the same way regardless which category buyer is responsible for the specific project. Next to the templates, you can bundle all company knowledge making sure that proven content is used and leveraged throughout each sourcing event. This can be done with the functionality called ‘Content Finder’. This functionality basically has two main components:

·       Copy content from previous projects:
As a category buyer you don’t need to set up every sourcing project from scratch, but you can easily copy all the content from previous projects, which are executed by you or any other category buyer in your organization across the globe.

·       Adopting content from the Sourcing Library:
In the sourcing library you find all available and approved content which you can add to your sourcing event by one mouse click. This library can contain a wide variety of content such as documents related to legal compliancy or commodity/region specific information. All this content is reusable and is maintained by authorized users in the system.

3. Delegating Sourcing back to the Business 

After decennia of increasing the involvement of procurement in sourcing projects, a new phase has arrived in which procurement is delegating sourcing back to the business. Currently, this is mainly done for repetitive mini tenders - where framework agreements are already in place - and for business areas like IT and Marketing. In these cases, procurement moves from executor towards advisor.

SAP Ariba facilitates this by the RFQ process in Guided Buying. There are three RFQ types which are supported in SAP Ariba Guided Buying; No Touch, Low Touch and High Touch:

·       No Touch requires no involvement from procurement at all. Business can submit and award quotes. Mainly used for RFQ’s from a lower value, for specific commodities and only with preferred suppliers.

·       Low Touch requires minimal intervention from procurement, for example approval. The business creates and submits the RFQ independently. However, the event can only be awarded by the business after approval from the category buyer. Mainly used for RFQ’s with a higher value, but for low-risk commodities.

·       High Touch RFQ’s are initiated and created by the business, but the responsibility will then move to procurement. Meaning that the Procurement Department will execute and award the RFQ. This scenario is mostly used in case the RFQ reaches a certain threshold, or the chosen commodity code requires additional steps to be taken.

The rules to determine which RFQ process is applicable should be determined by procurement and set up in SAP Ariba, making sure the procurement process stays compliant.

Want to learn more on how a platform such as SAP Ariba can add value to your procurement organization or want to leverage your current SAP Ariba investment? Please join our Procurement is Art event on September 21st or contact Bart de Bijl (bart.de.bijl@mccoy-partners.com).