Strategic sourcing: improve efficiency in purchasing process. Accenture case study.

Nowadays the economic world is characterized by a dynamic environment that make the enterprise aware of the increasing production, and consequently competition, in each sector. In order to survive in this uncertain context where the competition become more and more aggressive, the management of the purchases in company and, implicitly, the relationship between company and suppliers assumes a critical role. The strategic role of procurement, intended as not only the pure purchasing process but everything involved in the relationship with suppliers, is fundamental to increase the "value proposition" that the company delivers to its customers and the impact of the firm in the market. Procurement is the first function of the supply chain and includes a huge number of activities. These activities can be grouped in two main processes. The first refers to every actions from the birth of a whatever procurement need to a contractual agreement for the supplier identified to provide that need. This is commonly named source to contract (S2C) process. The second one is strictly linked with the purchasing process so it includes all the activities from a purchasing request made by an employee up to the supplier payment. This is frequently identified as the procure to pay (P2P) procedure. The research objective, the result of an internship at the Procurement department of Accenture in Milan (MI), is to apply strategic sourcing process directly to a medium/large Italian bank in order to solve and make efficient a particular procurement need. The efficiency does not refer only to a cost reduction with respect to the previous service, but it wants also to underline a better supplier management. This project identifies approaches the Accenture procurement department can utilize through its understanding of strategic sourcing best practices from industry and through the utilization of tools to improve client procurement operations. At the beginning it’s important to offer a smart overview on procurement world describing its evolution over the years and its unique role nowadays in providing a competitive advantage to the company. Then it is quite important to analyse the aspects of the purchasing department, as the leading body of determination of competitive advantage and value creation, and its actors which are entitled to manage effective purchases within the company. It was gradually realized that this function, if well administered, can contribute to determining the increase in the margin of the product and, more generally, the operating result of the company. The study focuses on the standard procedures used by the company's purchasing department for the choice of assigning a supply and on the performance indicators to which the department must refer; the goal was to identify possible areas for improvement and to propose solutions both in the short and medium - long term suitable for improving the present situation. The sourcing process is firstly described theoretically and then applied in the real case. Finally, the results obtained with respect to the objectives will be described. Generally, both the short-term objectives and the changes expected for the medium-long term, result an improvement in Procurement activities in terms of reduction of subjectivity in purchasing decisions, increase in process efficiency, cost savings, timing cut and quality enhancement.