Transformational Sourcing Services
Our approach to Transformational Sourcing gives our customers long-term incremental value and supply chain sustainability. We blend transactional procurement with best-in-class technology to achieve true innovation.
These things make us different:
- We do not “cherry pick” lucrative projects. We approach each category with the goal of managing 100% of the spend 100% of the time.
- We create a “Procurement Map” so everyone can see the work we are proposing and the value it will create.
- We are meticulous about the post-RFP implementation of contracts as the route to delivering true value.
- We openly aim to become the single point of contact for all your sourcing and procurement needs because we passionately believe that our approach is the best way to deliver value for your business.
- We proactively manage all your suppliers, continually seeking enhanced value on your behalf.
These differentiators inform all of our Transformational Sourcing services:
We start by providing an accurate assessment of the current state of your procurement function together with a roadmap to a ‘best-in-class’ future state.
As part of this process, we may offer:
- Spend Analytics itemized by business unit, category and geography as well as supplier fragmentation analysis and review.
- ‘Procurement Mapping’ combining the quantitative output from spend analytics with the qualitative output from our stakeholder meetings.
- An overall maturity ranking of the sourcing and procurement function.
- The identification of opportunities by category and sub-category.
- Team competency and ‘voice of the customer’ assessment.
- A proposal for how the operation could be best structured in order to deliver maximum value.
SOURCING AND CATEGORY MANAGEMENT
If successful, sourcing generates significant value; up to 15-30% savings on spend, improved control over your supply chain and a better informed and more motivated supplier network. We aim to deliver benefits on this scale with our unrelenting focus on the post-RFP implementation of contracts, supplier issue management, compliance management, supplier performance measurement and reporting, contract management and category review.
We can run full sourcing cycles on your behalf for project buys or to fill short term resource gaps, so you can have extensive sourcing capabilities ‘on demand’, without incurring expensive sourcing overheads.
Unlike many procurement providers, we have the scale and expertise to support the full procurement cycle end-to-end. Working with one point of contact in this way generates many efficiencies for our customers, including improved cash flow through optimized payment terms, reduced invoicing errors, improved compliance and reduced operational costs. It also contributes to continual future improvements by giving you consistent spend and management information.
We know from experience that our way with Source-To-Pay can give you savings that are 5-10% beyond standalone sourcing or procure-to-pay optimization.
The road to a best practice sourcing and procurement function can be long and complex. Our Strategic Assessment gives access to senior practitioners who can shine a light on the way forward.
We take a pragmatic approach to analysing your sourcing and procurement functions of a customer on both a qualitative and quantitative basis. The result? Not only an accurate assessment of the current state but also a roadmap to a ‘best-in-class’ future state. A full strategic assessment is based on three key inputs from the customer: 12 months spend data, such as GL, AP, Corporate Card, PCard Travel Data; existing contracts as available; and meetings with category managers and key stakeholders from across the business.
We focus on enterprise engagement, spend visibility, sourcing maturity, contract compliance and technology utilisation. Following a strategic assessment, we will deliver a number of outputs, including:
- Spend Analytics, which give the customer visibility of spend data by business unit, category and geography as well as supplier fragmentation analysis and review
- ‘Procurement Mapping’, a coherent and highly visual map which combines the quantitative output from spend analytics with the qualitative output from our stakeholder meetings
- An overall maturity ranking of the sourcing and procurement function
- The identification of opportunities by category and sub-category
- Team competency and ‘voice of the customer’ assessment
- A proposal for how the operation could be best structured in order to deliver maximum value
Customers tell us that the strategic assessments add real value to their businesses and generate renewed impetus to their procurement teams
Ensuring sustainable value and continuous improvement
Effective sourcing lifts procurement organisation from being a bureaucratic form filling engine to one of a business partner that supports value delivery for other functional leaders. With indirect procurement the ability to engage a large number of stakeholders and present a unified, consistent front to the supply market only happens with careful and empathetic procurement professionals applying rigorous sourcing and change skills.
If successful, sourcing generates significant value – up to 15-30% savings on spend, improved control over your supply chain and a better informed and more energised supplier network
From strategy and opportunity identification we’ll execute the sourcing project to a successful implementation – and ensure that their full potential is realised through ongoing category management.
At Xchanging, we believe in solid facts not optimistic forecasts. For example, we do not recognise a saving until a transaction has taken place and the saving has actually been achieved. That’s why we have an unrelenting focus on the post-RFP implementation of contracts, supplier issue management, compliance management, supplier performance measurement and reporting, contract management and category review.
As the contracting process proceeds with each supplier, our objective will be to build in contractual clauses that commit the supplier to delivering incremental value over the life of the contract. Regular performance management reviews are held, involving our team, the customer and the supplier, in order to manage the contract and ensure further value is delivered to the customer.
‘On demand’ access to our extensive resource pool for discrete sourcing project for customers without the appropriate expertise or resource.
Drawing on the expertise of our people, the proven attributes of our processes and the market-leading performance of our technology, we can run full sourcing cycles on your behalf for project buys or to fill short term resource gaps.
Few providers have the scale and expertise to support the full procurement cycle end-to-end – Xchanging do.
The synergies of placing the ordering and payables process under the umbrella of sourcing are significant. Taking an end-to-end perspective generates cash flow improvement through payment term optimisation. It reduces errors and bureaucracy from invoice errors. And it drives improved compliance to preferred supplier and pricing agreements and dramatically reduces the operational cost of the processing teams.
Finally, it improves the quality of spend information and management information to help spot further information.
Xchanging are strong advocates of source-to-pay as the optimal sourcing and procurement operating model. We believe that a harmonious, streamlined end-to-end service generates incremental value of 5-10% beyond standalone sourcing or procure-to-pay optimisation.
Co-Sourcing is collaborative sourcing between partners and is Xchanging’s premium offering; the fully managed service.
We believe there are many ways in which we can add value but the most effective method is to become more than an outsourcing provider; to be a Co-Sourcing Partner.
This collaboration comes in three clear and important areas: delivery, commercials and governance.
- We believe that sourcing and procurement services need to be delivered alongside our customer, at their site, not from behind a desk hundreds or thousands of miles away.
- We believe that we should put our ‘skin in the game’ and only be rewarded for delivery, shouldering the risk on behalf of our customers.
- We believe objectives should be mutually aligned and decisions should be taken as a partnership through mutual governance; instead of ‘us’ and ‘you’, it is ‘we’.
Co-Sourcing means we work alongside our customer to manage the full sourcing and procurement function, sharing from Spend Analytics through to Procure-to-Pay.
We believe Co-Sourcing is the future of fully-managed procurement outsourcing, replacing the traditional model. Here we shed some more light on what Co-Sourcing looks like:
|Category ownership||Partnership and joint ownership through category review boards that meet on a regular basis.|
|Sourcing approach||Takes an holistic view of enterprise spend though comprehensive annual planning process at a category and sub-category level.|
|Delivery location||Onsite, high-touch delivery to develop cultural fit and enhance stakeholder buy-in.|
|Talent||Seasoned sourcing and procurement practitioners, with experience managing complex categories for large global organizations.|
|Governance||Collaborative governance structure at all levels (Category, Service, Finance and Executive) to ensure mutually aligned objectives beyond cost savings.|
|Commercials||Outcome-based model, often through a performance-based model, where provider places ‘skin in the game.’|