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Why do you want to take Strategic Sourcing Capability Assessment to find out your maturity levels in procurement processes?

Maturity levels focus your efforts in process improvement with the goal to achieve the highest levels of maturity in six different procurement process areas. Incongruence in one process area can affect other areas that ultimately lead to inefficient and ineffective sourcing functions.

Strategic Sourcing Capability Areas

  1. Procurement Planning: The process of identifying which business needs can be best met by procuring products or services outside the organization. This process involves determining whether to procure, how to procure, what to procure, and when to procure.
  2. Solicitation Planning: The process of preparing the documents needed to support the solicitation. This process involves documenting program requirements and identifying potential sources.
  3. Solicitation: The process of obtaining information (bids and proposals) from prospective sellers on how project needs can be met.
  4. Source Selection: The process of receiving bids or proposals and applying evaluation criteria to select a provider.
  5. Contract Administration: The process of ensuring that each party’s performance meets contractual requirements.
  6. Contract Closeout: The process of verifying that all administrative matters are concluded on a contract that is otherwise physically complete. This involves completing and settling the contract, including resolving any open items.

Strategic Sourcing Capability Maturity Levels

Level 1—Ad Hoc

  • The organization acknowledges that contract management processes exist, that these processes are accepted and practiced throughout various industries, and the organization’s management understands the benefit and value of using contract management processes.
  • Although there are not any organization-wide, established, basic contract management processes, some established contract management processes exist and are used within the organization, but applied only on an ad-hoc and sporadic basis to various contracts.
  • Informal documentation of contract management processes may exist within the organization, but are used only on an ad-hoc and sporadic basis on various contracts.
  • Organizational managers and contract management personnel are not held accountable for adhering to, or complying with, any contract management process or standards.

Level 2—Basic

  • Some basic contract management processes and standards have been established within the organization, but are required only on selected complex, critical, or high visibility contracts—such as contracts meeting certain dollar thresholds, or contracts with certain customers.
  • Some formal documentation has been developed for these established contract management processes and standards.
  • The organization does not consider these contract management processes or standards established or institutionalized throughout the entire organization.
  • There is no organizational policy requiring the consistent use of these contract management processes and standards other than on the required contracts.

Level 3—Structured

  • Contract management processes and standards are fully established, institutionalized, and mandated throughout the entire organization.
  • Formal documentation has been developed for these contract management processes and standards, and some processes may even be automated.
  • Since these contract management processes are mandated, the organization allows the tailoring of processes and documents, allowing consideration for the unique aspects of each contract, such as contracting strategy, contract type, terms and conditions, dollar value, and type of requirement (product or service).
  • Senior management is involved in providing guidance, direction, and even approval of key contracting strategy, decisions, related contract terms and conditions, and contract management documents.

Level 4—Integrated

  • The procurement project’s end-user customer is an integral member of the procurement team.
  • Basic contract management processes are integrated with other organizational core processes, such as cost control, schedule management, performance management, and systems engineering.
  • Management uses efficiency and effectiveness metrics to make procurement-related decisions.
  • Management understands its role in the procurement management process and executes the process well.

Level 5—Optimized

  • Contract management processes are evaluated periodically using efficiency and effectiveness metrics.
  • Continuous process improvement efforts are implemented to improve the contract management process.
  • Lessons learned and best-practice programs are implemented to improve the contract management processes, standards, and documentation.
  • Procurement process streamlining initiatives are implemented as part of the process improvement program.

For information about the research behind Strategic Sourcing Maturity Levels, please contact us at info@cpsmtraining.com