I liken the strategic sourcing journey as a marathon accomplished in a series of 100 meter dashes. Similar to the Tour de France, the annual bicycle race covering 3500 kilometers, it is organized and completed in stages. Some are long and require patient dedication to overcome tough mountain ranges and deep valleys, while others are shorter and require heads-down sprinting.  If you’ve personally been through a sourcing initiative, this analogy probably brings back fond memories, or maybe not.

The vast majority of organizations contemplating a strategic sourcing journey have a procurement department and processes in place to gather a set of qualified providers to competitively propose and bid the scope of work. A study of various internal procurement processes yields the following high-level work breakdown sequence:

   1. Develop and publish RFP
   2. Answer questions from providers
   3. Receive RFP responses
   4. Evaluate and down-select the RFP responses
   5. Invite providers to and host oral presentations
   6. Conduct reference checks
   7. Conduct site visits
   8. Make selection
   9. Negotiate with selected provider(s)

In order to speed up the overall cycle time, you must focus on efficiency gains at each step - starting with the first: Develop and Publish RFP.

The amount of time it takes to develop the RFP is usually in the hands of "the business".  And especially in these difficult economic times, “the business” is stretched to its limits and often lacks both the capacity and the capability to develop a world-class Information Technology (IT), Finance & Accounting (F&A), or Human Resources Outsourcing (HRO) request for proposal.

Because it is not a core competency of most business units to develop these types of RFPs, it often takes six months or longer to produce and gain internal legal approval.  Imagine if you could shorten this time period by up to three months.  From the inception of the decision to seek a strategic sourcing solution, a world-class RFP can be published in 9-12 weeks, mostly dependent upon how fast your internal organization can mobilize.  Yes, this means how many 100 meter dashes can your organization sustain?

Start with some help from an advisory firm who not only specializes in the strategic sourcing space, but has a proven track record and methodology for the sourcing process; specifically, those who help in developing RFPs. They often come to the table with tools and templates for key components such as Statement of Work (SOW) documents, Service Level Agreement (SLA) guides, and a full Table of Contents (TOC) designed to convey your sourcing strategy, objectives, and requirements to the intended audience: Providers.

In my most recent client engagements, the templates we used were already a 70 - 75% match for SOWs covering Application Development and Maintenance as well as Cross Functional services.  All else being equal, if you save three months up front, it translates into a three month head start on realizing your sourcing solution value.

Executive sponsors are always striving to improve time-to-value.  You’ve just saved 50% of the time to develop and publish a RFP, jump starting your sourcing journey, and setting up your company to achieve run-rate savings ahead of schedule by a quarter.  (I’ll post strategies for more gains along subsequent stages of the journey in future blogs.)