This is a subject near and dear to my heart as it should be to anyone in the Procurement field. After the contract is signed and the Strategic Sourcing Project officially comes to a close, how do we ensure that the projected cost savings are actually achieved over the life of the contract?
People new to Sourcing assume that once the contract is signed, the hard work is over. Sometimes, the hard work is just beginning at that point. I just read a great article by Eric Issa which offers four guidelines to help keep the cost savings coming.
Here are the highlights:
- Procurement must be sponsored at the executive level.
- Employees must continually improve their Sourcing skills, not just relying on consultants during the initial project.
- New procedures and tools must be put in place and communicated if end users are expected to comply.
- Measure all savings, real as well as projected.
Eric makes excellent points. Read, memorize, and put into action!
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