Our Source-to-Contract Philosophy
Source-to-Contract is what we do and we’ve been doing it since the term was invented. Along the way, we learned many great lessons from some of the world’s best organizations. The best Source-to-Contract teams we’ve seen have several characteristics in common:
1. Transparency wins – In our industry, people speak most often about savings as the main value driver in Source-to-Contract. However, what we are all really doing is creating more efficient and transparent markets in the purest economic sense of the word. By bringing together more buyers and sellers, and giving them all the same information, we are better able to determine what the true market price is for a good or service. This benefits all market participants over the long haul by removing misinformation, side deals and other barriers to the efficient working of the market whether it is for equities or paper clips.
2. It just plain works – There’s no shortage of information out there on the benefits of Source-to-Contract. A simple Google search will turn up a host of studies on the various value drivers and associated ROI. Still, a significant portion of organizations have not made it a part of their standard operating model. We believe it is part of our mission to help those organizations “see the light” and make Source-to-Contract part of their “day-to-day”. After all, you’d never find a carpenter pounding a nail with his fist so why should you find a buyer conducting a negotiation or RFP without the right tool?
3. Keep it simple – Making Source-to-Contract easy enough for everyone to participate is a core piece of Scanmarket’s overall philosophy and it’s hard to miss if you look at our material over the years. There’s a reason that we include it so often: if there’s any one thing you can do to promote the success of your program, it’s to make the process accessible and simple so that more participants take part. In the words of Albert Einstein, “Everything should be made as simple as possible, but not simpler”.
4. It’s more about people than technology – While it might be heresy for an Source-to-Contract software company to say this, technology isn’t the most important part. People make markets happen. Technology just helps move them along. You may have the most advanced and intuitive Source-to-Contract tool available but, if the participants don’t believe it’s in their interest to participate, the market will not function. There’s a good reason that Procurement is often referred to as a “sales” function. We are selling, both inside and outside our organization, the idea that participating in our programs and projects will benefit our internal stakeholders and our suppliers.
5. Get everyone involved – Similar to the need for making transparent and efficient markets, we feel strongly that Source-to-Contract solutions work better when everyone is involved. There are many philosophies about how to best structure your organization to achieve this, but the key message is to share the expertise, share the resources and do whatever is necessary to get successful Source-to-Contract happening on all levels of your organization. A Center of Excellence should not be the only place Source-to-Contract happens. It should be the coach helping others be successful.