The Foundation of Every Sourcing Event
Before you can optimize, you must understand the current state. The quality of your data determines the quality of your sourcing outcomes.
📦 Data Sources to Collect
- Spend Data: Extract from ERP/accounts payable systems (SAP, Oracle, etc.). Clean and classify by supplier, category, business unit, cost center, geography. Use Pareto analysis (80/20) to identify concentration.
- Contract Data: Current contracts, terms, expiry dates, auto-renewal clauses, notice periods, pricing mechanisms, SLAs, penalty provisions.
- Volume Data: Quantities, frequencies, seasonal variations, demand forecasts.
- Stakeholder Feedback: Pain points, quality issues, service gaps, desired features, strategic priorities.
- Market Data: Commodity indices, market reports, regulatory changes, technology trends.
💡 Pro Tip: Start with a Pareto analysis on your spend data. In most categories, 20% of suppliers account for 80% of spend. Focus your efforts on the vital few, not the trivial many.