Races have a starting line and a finish line. Whether running a sprint, in a Formula One race car, on a thoroughbred horse or in a homemade soap box derby car - the same fundamental premise applies: get off to a great start, run an effective race and get to the finish line in the quickest way possible.
Races begin with the announcement “ON YOUR MARK; GET SET; GO!” or some variation of this timeless announcement. The key is that racers are provided direction as to when to find their mark (starting point) and get set (a time to prepare). These stages leading up to the “Go!” moment are crucial to an effective start.
Imagine if the starter instead says, “On Your Mark; Go; Get Set!” or “Go; On Your Mark; Get Set!” There would be a series of false starts and confused racers, all negatively impacting the race and altering its outcome. Yes, even the fastest man in the world, Usain Bolt, may not have won the Olympic Gold Medal in the 100 Meters if he was not properly at his mark and set. The order matters!
As with a race, any business project needs to start properly and prepare for success.
“ON YOUR MARK”
For Strategic Sourcing projects, the “On Your Mark” stage includes very specific activities, all of which defines the starting point for the project and aligns the project team around this “mark.” These activities make up the Define Stage (Stage 1) of the Strategic Sourcing Process:
- Develop a Category Map to fully understand project category spend, key suppliers & sub categories
- Create the Project Charter to ensure clear objectives and project goals
- Identify the Stakeholder Map and create a Communication Plan to enable buy-in and support for project recommendations
- Develop a RACI Chart to clearly identify the role each person will play in the development of the outputs during the sourcing process
- Finalize the Project Plan to ensure that the team is appropriately progressing through the project and meeting timelines
For Strategic Sourcing projects to properly “Get Set,” the process drives project teams through the Gather/Analyze and Strategy Creation Stages (Stage 2 and Stage 3, respectively). These stages enable proper understanding and planning before you “Go” to market with the sourcing initiative. As with a race – the order matters!
The goal of Stage 2 is to become armed with information. These are the key activities that make up the Gather/Analyze Stage (Stage 2) of the Strategic Sourcing Process:
- Perform an Internal Data Analysis to assess and understand current state spend for the given category
- Design and build a detailed Spend Baseline for the project category to define the existing total cost of the category
- Develop an External Market Analysis of the project category to enable a thorough understanding of market dynamics and supply base
- Determine key Business Requirements that will become the basis on which you assess and select your most appropriate sourcing strategy
- Define the Key Performance Indicators (KPI) for which suppliers will be measured against
- Identify and document the existing Supplier Performance of the incumbents
The goal of Stage 3 is to leverage the information gathered throughout the process to develop and plan the best-fit sourcing strategy to deliver the requirements. These are the key activities that make up the Strategy Creation Stage (Stage 3) of the Strategic Sourcing Process:
- Reflect on the baseline spend, market intelligence, business requirements, and KPIs
- Use Strategic Review Tools to provide insight on the category, assessing the market dynamics and supplier/buyer behaviors
- Identify and understand the gaps and subsequent opportunities based on current state behavior and future state possibilities
- Generate, evaluate and select the preferred sourcing options - distinguishing between strategic and tactical/quick wins
- Develop the project sourcing strategy and communicate to obtain stakeholder approval
Once the project team has performed the necessary “On Your Mark” and “Get Set” activities, it is then time to “Go!” and execute against the sourcing strategy. When looking at the key preparation activities such as developing a Charter, Project Plan, Business Requirements and Sourcing Strategy, it is incomprehensible to think that the team will get off to a great start, run an effective project and get to the finish line (a great sourcing outcome) without following the proper order. Just as it is incomprehensible to think that a sprinter can run his/her best race if not properly prepared before they hear “Go!”
The order matters! The discipline to follow the order matters - the successful outcomes of your projects depends on it! As with Olympic Champion, Usain Bolt, and other world-class runners, the finish line awaits you!
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