How Updating Contract Management Systems Can Improve Sourcing Strategy – SPONSOR CONTENT
Organizations everywhere are making digital transformation a priority, but some may be overlooking an area critical to their growth: transforming their strategic sourcing and procurement systems.
Many procurement and finance teams struggle with outdated manual and ad hoc processes. They use legacy tools where valuable insights are trapped in spreadsheets or siloed across different desktops and shared drives—or, worse, lost to employee turnover.
In a recent survey by Harvard Business Review Analytic Services, nearly all respondents agreed that supplier management was critical, while only 21% reported having strong data-analysis capabilities for supplier management.
But by adopting contract management systems that centralize these operations, some sector leaders are realizing greater transparency, collaboration, and productivity—even as they boost security and cut costs. And they’re streamlining how they manage partners’ contract obligations and renewals, saving time and money as they convert previously tedious tasks to efficient, modern workstreams.
Better contract management, better sourcing strategy
A robust, centralized, cloud-based system for supplier management can help simplify an increasingly complex landscape of intricate supply chains, multiple vendors, and regionally varied legal and compliance concerns. With a centralized, cloud-based system, procurement teams can become true strategic partners, helping finance, IT, HR, and legal easily access supplier data, evaluate performance, and deliver better business outcomes.
Organizations in different sectors experience varying stresses that strategic sourcing can help alleviate.
For financial services firms, successful procurement teams can support their businesses through a changing market. By examining existing supplier relations and identifying opportunities to renegotiate terms, they can help preserve cash on hand through market swings. And teams can support business continuity when they streamline remote collaboration by consolidating data on suppliers and contracts—and make this data instantly accessible throughout the organization.
In the technology sector, improved visibility into global supply chains can help procurement teams manage disruptions and act quickly to identify partners equipped to reach mutually beneficial solutions. Firms can make the most of real-time insights and centralized contract information to efficiently communicate with suppliers, eliminate disparate email chains, and engage in continuous scenario planning to balance cost against risk.
And at professional and business services firms, procurement teams that get better insights into supplier relationships can more effectively manage and prioritize them across multiple lines of business and client relationships. Online contracting platforms enable those teams to run requests for proposal (RFPs) and reverse-auction events in dramatically less time, providing the agility to meet rapidly evolving business needs while planning strategically for the future.
Strategic sourcing for business results
At VMware, a leading multicloud provider with more than 500,000 customers globally, the strategic sourcing team was working with inflexible legacy tools. Its existing procurement platform was proving cumbersome for business units. Some procurement experts and their business partners were even working around the system rather than with it. This limited the visibility into which projects were going to market and where processes were breaking down—and led to missed opportunities for savings.
VMware prides itself on a culture of continuous innovation and a refusal to settle for good enough. The sourcing team knew it needed a modern platform that could drive its end-to-end process.
The team adopted an intuitive, self-service platform that has become a single source of truth across the organization’s global sourcing activities, driving RFPs, auctions, and planning processes on a daily basis. It’s also driving savings. “We’re no longer leaving money on the table,” says Kellee Garcia, VMware’s center of excellence manager for global strategic sourcing.
At VSP Vision Care, the largest not-for-profit benefits provider in the U.S., the sourcing team strives to engage as early as possible with its internal business units and large supplier base. To encourage early engagement and compliance, VSP’s sourcing team implemented technology that allows for automated RFPs, easy contract drafting, and collaborative sourcing evaluation.
The team now has a centralized hub of data, templates, and best practices on sourcing. An intuitive interface has enabled fast adoption across the organization and with partners, encouraging compliance. The interface offers downloadable dashboards that provide useful reporting across VSP’s lines of business.
Now VSP can source strategically in all practices across the company, from complex services to routine goods. Getting more sourcing projects into the team’s pipeline helps provide greater savings and more opportunities to collaborate on strategic supplier partnerships.
Procurement teams are vital to the growth of their organizations. They manage supplier relationships across the enterprise, drive enterprise-wide cost savings, and ensure reliability, flexibility, and compliance. By adopting the right technology for strategic sourcing, supercharged teams can help their organizations become more agile and more transparent to grow and lead their sectors.
Explore how Workday Supplier Contract Management can help you centralize your contract data and drive immediate business impact.