When conducting a sourcing initiative, there are many factors that must be considered to keep the project on track and achieve the best results. While I would love to say that every project I’ve worked on in my career as a sourcing professional has gone as originally planned, that would be an unrealistic expectation. There have been numerous reasons that projects have fallen off course, some which could not be controlled, while others could have been mitigated earlier in the process had they been accounted for. Below are a few common examples of how sourcing projects can be thrown off track if not taken into consideration.
- Missing Decision Makers from Stakeholder Team
When working with large teams on a project, it can get complicated to manage all of the stakeholders and ensure that the right people are in the room to make and act on a final decision. There is nothing worse than going through a sourcing event only to have a new stakeholder come out of the woodwork and derail your progress. It is essential that you do your due diligence when creating the project team to ensure that the final decision makers are involved and that the team includes all relevant parties.
For example, you may want to check that all departments who work with the supplier are present or determine whether Finance should be involved for budget approval processes. Sometimes, getting started without all key stakeholders on board may be unavoidable as new team members are hired and need to be brought up to speed on the project. If that does happen, you should proactively discuss this new addition with the team to mitigate any potential delays, as well as bring them up to speed as soon as possible.
- Missing Suppliers and/or Spend
Just as with missing a member from the project team, not capturing all spend or suppliers associated with your project can disrupt your progress and, sometimes, send you back to square one. Not including all relevant spend, suppliers, usage, etc. can lead to issuing revisions or amendments to the RFx or, in some cases, can invalidate the results because they are not accounting for the entire current state. The first step is to review a spend report to create a list of potential vendors who may be providing the products/services under review.
Also, similar to how you vet any stakeholder who works with a supplier, you should understand from the stakeholder all other suppliers who provide the same or similar services. Finally, if a supplier or portion of the spend is being removed from the scope, you should understand why that is and document that reasoning to avoid potential issues once the results come in.
- Creating an Unclear Scope of Work
A common mistake you can make when conducting a sourcing event is going to bid before your scope of work is completely ready. This may be due to pressure to meet a deadline or a lack of readily available information, but this can have significant consequences on the success of your event. If your scope is too ambiguous, you open the door for suppliers to make assumptions and the proposals you receive may not be what you’re looking for or will be too different for an apples-to-apples comparison. Along the same lines, by not providing sufficient information the first time around, you may have to issue an amendment to the scope covering the gaps or spend significant time answering supplier questions after the RFx is sent out. While it may have an impact on the overall timeline, it is worth your time to spend more time making sure your scope is ready before you release the RFx rather than paying for it on the back-end.
- Providing Tight Timelines for Requests
There have been countless projects where we were brought in to conduct an RFx without a minute to spare before a project launch or where the stakeholder’s expectations of the timeline for a sourcing event was unachievable. Unfortunately, when faced with a tight timeline certain parts of the process may need to be expedited or, potentially, skipped altogether. As already mentioned, pressure to meet deadlines can lead to going to market before a scope is fully developed. Additionally, your supply base may decline to participate in your event if the turnaround times on requests are expedited. Timelines can be a project’s best friend or worst enemy, but it is essential that the timeline is realistic and accounts for changing circumstances – otherwise the results will not be as effective.
- Not Accounting for Holidays/Vacations
Depending on the location and/or industry, companies may be closed for extended periods of time during the year (ie.g., summer holidays). Not only are you working around offices being closed for holidays, but you also have to consider vacations and the days right after a holiday when people are catching up on the lost time. If you are developing a project plan that takes place over November and December, you essentially have to double any timelines to account for the holiday schedule. All of this must be considered if you are planning a sourcing event or expect to receive information from your suppliers during this time.
It is important that you consider the factors that could potentially impact the project results when developing the strategy and timelines. There are many things that can impact a project’s timeline. While some can’t be predicted, you can predict others and prevent them from hindering your projects’ success.
If you’ve enjoyed this post about mistakes in the sourcing process, you’ll probably love the NLPA online course covering common mistakes in the negotiation process, “Negotiation No-No’s.”