Collaboration Technology: The Key to Better Planning and Sourcing
Financial planning and analysis (FP&A) and sourcing teams across industry sectors are struggling to deal with a global supply chain disrupted by a triple whammy of ongoing challenges from the pandemic, rising energy costs, and stubbornly high inflation.
Supply chain volatility and economic uncertainty have magnified the need for enterprises to deploy collaboration tools that eliminate operational silos and streamline procurement. Many future-focused organizations are adopting cloud-based sourcing and planning software to facilitate real-time planning, budgeting, and stakeholder collaboration.
Overcoming operational constraints
The inability of internal and external stakeholders to collaborate on a shared data set is a primary reason for the misalignment of operational and financial planning and sourcing. Many organizations use legacy solutions that rely on manual and inefficient processes for planning and sourcing, which can result in siloed information systems that impede growth.
Bridging these data gaps can help facilitate cross-disciplinary cooperation and can drive positive outcomes. In a recent Harvard Business Review (HBR) Analytic Services survey of financial planning and procurement executives, 51% of respondents said better data integration results in more accurate budget forecasting and reduces overspending.
Siloed organizational information systems are significant hurdles to collaboration between FP&A and sourcing teams. In addition to needing integrated technology platforms, the organizational structures themselves may need realignment, as having the planning and sourcing teams report to different department heads inhibits collaboration, 47% of survey respondents said.
Collaboration bottlenecks can hurt an organization’s supply chain resilience. In service industries, accurate forecasting of employment levels directly affects the sourcing of office space and equipment. For manufacturers and retailers, disconnects between planning and sourcing can result in overspending on inventory or getting the wrong inventory to the wrong place.
Updating legacy solutions
Planning and sourcing teams need cloud-based technology in place of cumbersome legacy supply chain management tools, such as manually updated spreadsheets and email chains.
Automation can enable sourcing departments to ensure that operations teams have the information they need for purchases that reflect negotiated savings and price caps. Real-time procurement data can also help FP&A teams update their plans and budgets to reflect constantly changing market conditions.
Among the survey respondents from high-performing organizations, 42% said their planning and sourcing functions share real-time access to the same data. The organizations that best facilitate their collaboration have made strategic commitments to using the best available technology solutions. “They really put their money where their mouth is in terms of gaining visibility across their operations,” says Chad Autry, professor of supply chain management at the University of Tennessee.
Solutions designed to enable stakeholder engagement and cooperation can pay big dividends. Many companies that invest in collaboration-enabling technology are gaining a competitive advantage, as facilitating seamless data sharing improves their efficiency and reduces their costs.
Helping companies solve real-world problems
Organizations can customize their cloud-native sourcing and planning platforms for specific customer needs and scale them up or down as needed. Easily configurable frameworks enable organizations to deploy and manage their own platforms—so they can make changes without rewriting code or starting over.
Enterprises investing in strategic sourcing and planning solutions need a platform that is open, extensible, and interoperable, enabling connectivity with other productivity applications and collaboration tools. It’s also important to implement technology that uses machine learning to optimize workflows and analyze real-time data for actionable business insights.
At any organization, the optimal technology should reflect its unique supply chain needs and processes and should be easy to implement and use. Successful automation reflects an enterprise’s planning, sourcing, and financial processes.
NTT Global Sourcing replaced its legacy workflow processes with strategic sourcing software that facilitates a source-to-contract system to provide real-time insights into projected savings. The platform streamlines collaboration with internal and external stakeholders, enables shared workflows using a common data set, and provides a dependable audit trail.
Improving collaboration between planning and sourcing teams leads to improved supply chain resilience and better efficiency. Organizations may know when new technology is working when their planning and sourcing groups no longer rely on traditional manual methods of communicating and collaborating.
“When planning and sourcing are well integrated and working from the same data, good things happen,” says Linda Dunn, assistant professor of supply chain management at Georgetown University. “You have a stronger understanding of your suppliers, facilitating good supplier relationship management.”
Improving the alignment between your organization’s planning and sourcing teams can help you improve your operational efficiency and reduce your costs. Better supply chain risk management capabilities can also help your FP&A and strategic sourcing teams act faster and more efficiently, enabling more efficient sourcing, production, and distribution—as well as growth and leadership in your sector during a fast-evolving economic climate.
For more detailed insights on the benefits of strategic sourcing and collaboration technology, download the HBR–Analytic Services research report “Optimizing the Supply Chain by Aligning the Planning and Sourcing Functions.”