Sourcing Professionals: Get Ready To Deal With Volatility

Most business people would regard volatility as a given even in the best of times. Even so, volatility looks set to be historically high for the coming decade. In this context, sourcing professionals need to make sure that they keep up with the business, its clients, and its suppliers. Issues such as information from top management, broken relationships with sourcing's business stakeholders, a lack of proper information systems, or inflexible long-term contracts with suppliers will need urgent attention. Sourcing's three core tasks — demand management, contract execution, and vendor management — all demand new focus in times of heightened volatility. To keep meeting your goals, you will have to know your business better, map out a flexible and iterative approach, and implement best-practice sourcing processes and governance. You will need to emphasize contract flexibility and its ability to grow with the company. At the same time, the vendor management office (VMO) will need to double its focus on information gathering. And relationship management will need renewed effort at all levels in the organization — operational, tactical, and strategic.