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by Rosalyn Olney, Partner at Source-Re

Agile sourcing is something all procurement and sourcing professionals are aware of as a concept and many claim to understand to a greater or lesser degree.  Many, indeed, are prepared to state that it is commonly used within their organisations.

However, experience in supporting pan-sector clients over the last few years, in developing sourcing and procurement strategies, suggests a somewhat different picture. There is a good degree of confusion around what agile sourcing actually means, why is it important and, more importantly, how and when it should be deployed.

Agile originates from, and is a very well understood term, in software development with a clear methodology and defined processes.  And, understandably, Agile as a term has become synonymous with corporate speed and flexibility.

In recent years ‘agile’ has found its way into the procurement lexicon but without a clear definition and principles.  And the reality is that, on occasion there is more discussion about agile sourcing than actual agile sourcing taking place.

When handled by experienced practitioners, and in an environment that understands its benefits, agile sourcing is an immersive and collaborative methodology that sets both parties up for a clearly articulated joint vision and outcome.   And its benefits can be widespread.  However, if you delve a little deeper there is a degree of nervousness in the sourcing and procurement community to utilise this method.  And this is frequently down to a lack of understanding of the methodology and how to implement it in any given procurement event.  In addition, risk in the unknown is often cited as the reason not to undertake agile sourcing.  Therefore, overcoming a lack of understanding of the rationale for agile sourcing is a sizeable challenge for procurement functions.  And this is then often overlayed by vendors who equally do not have the capability or internal risk appetite to work in this manner.  It is little wonder that many organisations have struggled to implement agile in procurement.

A cornerstone of appreciation of the agile sourcing methodology is awareness that it does not replace traditional procurement routes. It has its time and place. And it can be helpful to define a set of criteria that need to be met to ensure that agile is the right sourcing process for any identified demand.  These include having both a client and vendor who have a reasonably high degree of innovation or transformation in their requirement and offered solutions and who are both willing to invest time upfront to design the optimum solution.  There also needs to be a strong degree of desire to collaborate and trust the process.  And the capacity in both the internal procurement and business stakeholder team, as well as the vendor team to invest the up-front time to design the solution and the underpinning contractual and commercial principles.

And so first and foremost it’s important to understand the key fundamentals of agile sourcing and then to pick the right projects to take down this path. 

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