Thought Leadership

What is strategic sourcing and what does it mean for your project?

06 September 2022

What is strategic sourcing?

As we navigate the challenges presented by the materials shortage, Brexit and the pandemic recovery, procurement has never played a more important role in bringing businesses and communities together.

Strategic sourcing is the process of maintaining long-term relationships with suppliers in order to reduce the complexity of the supplier base through strong communication.

Many public sector organisations use strategic sourcing to ensure that they have access to an efficient supply of the goods and services that are critical to the day to day to running of their organisation.

The value of strategic sourcing has increased in recent years, and organisations have adopted more effective methods of procurement to drive value and increase transparency throughout the process.


What does strategic sourcing mean for your project?

  • Sourcing is matched carefully with business goals
    By closely matching your sourcing approach with your business strategy, you can reduce waste and friction in the procurement process.
  • Long-term, high-quality relationships are built with suppliers
    Long-standing and collaborative relationships can be built through frameworks, allowing for direct award while also ensuring compliance standards are met.
  • Reducing risk in the process
    Closer relationships and business-centric sourcing mean that procurement risks are mitigated and projects progress at an increased pace.


What do you need for strategic sourcing?

  • Clear objectives
    It is essential you have a true understanding of your business and project needs. From there, you can set clear, manageable objectives that can be measured throughout the project and overall procurement journey.
  • Removal of manual processes
    When done correctly, strategic sourcing can streamline your processes, but you need to embrace automation or risk it having the opposite effect and slowing procurement down.
  • Finding collaborative suppliers
    By working with suppliers who understand and keep your objectives in mind, you can develop strong relationships with the best partners that suit your business needs.



Strategic sourcing is at its best when your whole organisation buys into it. When all departments throughout a company make an effort to work together, your strategic procurement team can make an informed plan for setting the overall direction for procurement aligned with your company’s business strategy.

Your company’s procurement strategy is one of the most important tools to help maximise its value proposition and serves as a guide for your organisation as it aligns with your overall business strategy.

More about Pagabo’s approach to strategic sourcing can be found on our frameworks page.


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