Opportunity Assessment and Sourcing Project Flow

SIG University Certified Sourcing Professional (CSP) program graduate Shridhar Kundaram shares his perspective on a four-step sourcing process that can help take your sourcing team to the next level.

Sourcing is a process that involves finding, selecting, evaluating, and managing suppliers for day-to-day and long-term purposes for goods and services needed in the organization/company. Sourcing will succeed if it has executive leadership support, collaboration with stakeholders, robust control of spending and policies, automation, and an approach clearly defined for categories. Sourcing involves four significant steps AssessAnalyzeExecute and Evaluate.


Assess – include the internal and external analysis of the organization, and gather information on the market, supply, and cost. The research includes the sourcing strategy approach, supply market and supplier selection, and category management. Execute forms execution basis to the implementation plan, RFx, negotiations, and contract. Evaluation includes benchmarking or redefining the basis of governance, supplier performance management, category performance, and continuous improvement plan. For all critical and high-spend projects/requirements, sourcing models would be helpful for implementation or considered as the steps involved will help make a clear, precise, and detailed decision on vendor selection.


We do not have any standardized process flow or model for sourcing projects; hence sourcing steps would be beneficial for critical, long term and high-spend projects. The assessment step would involve collecting all data related to company spending across all categories. This would be invoice data for the last three financial years. Invoice data will provide information or details with regards to commodity (goods/services), invoice description to understand the type of commodity, stakeholder, category, sub-category, business unit, currency, spend amount, date, supplier or vendor name, GL code (to identify id spend is CAPEX or OPEX). Information can also be gathered from previously executed sourcing projects done through RFx for each relevant category.


Analyze – All data gathered from the Assess stage would be considered to analyze the top 5 categories, top 10 suppliers/vendors, top 5-10 commodities, and top 10 stakeholders who are essential across the organization and drive spending across categories. We will start by reviewing contract documents with leading suppliers for consolidation with a single contract instead of multiple contracts for commodities. Supplier consolidation can be done where there are numerous suppliers for one entity.


Some repetitive things can be considered for catalog integration in the purchasing tool, saving time, effort, and money in the long term. Sourcing strategy can be global, local, and hybrid in nature. Wherein international would include consideration of suppliers who cater across all regions around the globe, local for niche and time constraint commodities, and mixture where global and local suppliers can be considered for items that cater for global and regional markets simultaneously, e.g.:- Advertisement.


Execute – Each project will have its sourcing strategy, which will be aligned to its category requirement and implementation. The basis of the scope, spending, and timeline required RFx process can be used. Tier 1 or 2 suppliers can also be considered the basis for the project’s need for diversification. The steps involved in case of a new or first-time project would be new supplier discovery, onboarding process, risk and compliance review (GSO review), and execution of Non-Disclosure Agreement. Once these steps are done foremost, the questionnaire and scope/requirement document can be shared with prospective suppliers for a response along with timelines.


A Pitch presentation is necessary to understand supplier potential and capability to meet stakeholder requirements. Business users will do scoring to evaluate technical, commercial, and all the other KPIs. Project award decisions would be taken per the proposal, pitch presentation, and overall scoring. Suppliers to whom the project has not been awarded are notified that the project has not been granted to them. We appreciate their efforts in responding. The contract process would start with executing the Master Agreement and SOW basis on time and material or fixed as per the project.

The Certified Sourcing Professional (CSP) Program is a 10-week course that focuses on the hard and soft skills of sourcing, including strategic sourcing and outsourcing methodologies, as well as best practices in negotiations.