Answer the questions below and keep track of your score to see how you stack up.
Do you always follow the same process and methodology for sourcing events?
0 – YES
1 – NO
Do you designate a single point of contact with suppliers during a sourcing event?
0 – YES
1 – NO
Have you ever begun a negotiation without knowing all of your items for negotiation, your “going in” position, your desirable position, and your bottom-line position for each item?
1 – YES
0 – NO
Have you ever told a supplier that they were the winning bidder in an RFP before you had completely negotiated the Agreement?
1 – YES
0 – NO
Have you ever spent more with a supplier than what was in the contract and the scope did not change?
1 – YES
0 – NO
Do you always work from the supplier’s contract terms and conditions for IT purchases?
1 – YES
0 – NO
Have you ever had someone sign an agreement that was not authorized to sign?
1 – YES
0 – NO
0-2: Your organization has many of the right tools and processes in place to maintain an effective strategic sourcing organization. As with many organizations there might be a couple of holes that need attention but overall your are able to maintain overall effectiveness in the process.
3-5: You fit the mold of most organizations. Good intentions exist but whether it’s lack of resources or lack of organizational support the strategic sourcing process is lacking in its effectiveness and service to the organization. In this category it’s highly likely that the total cost to the organization far outweighs the cost of fixing the process.
6-7: Your organization is literally bleeding cash. The outflow of cash with suppliers isn’t being managed effectively. It’s time to invest in the beginnings of a strategic sourcing process that will pay dividends for your organization.
It’s never too late. Most organizations, if willing to be honest with themselves, will see that some organizational framework exists for strategic sourcing but the lack of practical application costs your organization millions of dollars per year.
