Why We Wrote the Book Managing Indirect Spend

Procurement Solutions from Source One
Joe Payne, Director of Strategic Sourcing
Joe Payne, Director of Strategic Sourcing

by Joe Payne, Director of Strategic Sourcing 

The book Managing Indirect Spend: Enhancing Profitability through Strategic Sourcing is now available on Amazon.com and other book outlets. In this article, co-author Joe Payne reflects on the journey from conception to print.

I like to tell new hires at Source One that every day they come to work, they will learn something new. I tell them this not necessarily to motivate them, but to give them an idea of what they have gotten themselves into.

Strategic sourcing is an exciting field to work in as a consultant, and working for an entrepreneurial company that is not industry specific keeps things interesting. I’ve worked at Source One for almost nine years, and every day I deal with a diverse set of problems to solve and new things to figure out.

My co-author for this book, William Dorn, would certainly agree. This morning Bill was reviewing our dental plan with a new employee. By this afternoon, he was giving a presentation about strategic sourcing and American business practices and the challenges and opportunities of near-shoring to a group of students and business leaders in Mexico via a video conference. All in a day’s work at Source One.

The week of November 7th marks the release of our book, Managing Indirect Spend – Enhancing Profitability through Strategic Sourcing, by John Wiley & Sons publishing company, on Amazon and other Internet retailers.   The book was a nearly two year effort, and adds to the list of unique experiences I have had at Source One. The book includes insight and lessons learned from Bill’s and my experience over these last nine years at Source One, our prior careers and includes content from many other team members on our staff. I am proud of this book and glad I had a hand in writing it.

Whenever I talk to anyone in the industry about the book, the first question I get asked is “Why did you write it?” As consultants that focus on strategic sourcing, ultimately our experience working with customers, gaining an understanding of the differences between organizational cultures, and discovering how advanced companies are (or aren’t) in strategic cost reduction methods for indirect spend categories, is what led us to writing this book.

In most mid-sized and many large companies, people with backgrounds in Marketing, HR or IT have control of budgets in the millions or tens of millions of dollars, but often have little to no experience or training in strategic sourcing and negotiations. This book was written with them in mind.

This book was also written for the person in Finance or the C-Suite that has been tasked with getting control of costs for indirect spend categories, without being given the resources or tools to do so properly.

We know, based on our experience, that strategic sourcing is a powerful tool that can be used to reduce costs for indirect spend. We also know that there is a fundamental misunderstanding between how strategic sourcing is currently defined, and what it should be. Strategic sourcing is not just using eRFx software to run a bid for janitorial services. It is not simply leveraging the aggregate volume of office supplies across multiple locations to gain price concessions from an incumbent. Strategic sourcing is a process that includes aspects of project management, change management, and ongoing supplier management to ensure savings identified become savings achieved.

I often tell our customers that finding savings is the easiest part of indirect spend strategic sourcing. The process is solid, market competition and cost reduction opportunities exist, and if the spend has not been managed before, you can probably find a better price out there. The biggest challenge is getting the internal consensus to allow you to act in the best interests of your company.

We hope you find our book to be a useful resource in overcoming these challenges and effectively managing your indirect spend categories.  We also hope that every day you get a chance to learn new things and have new experiences, as we have here at Source One.

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