If your sourcing strategy is to deliver a breakthrough result in terms of cost reduction and service improvement, it is vital that you accurately define what it is that your strategy aims to source. This is done using a Business Requirements Definition or BRD.
In addition, your sourcing strategy will not sit in isolation - there will be a number of groups of people who have an interest in the outcome. These are called stakeholders. The Business Requirements Definition sets out what your sourcing strategy needs to deliver if all stakeholders are to be satisfied. It is a structured description of what you need to source from supply markets and covers the full range of stakeholder needs.
Defining your business requirements is a team game in that you must involve the appropriate stakeholders in your organisation. This will mean that the full set of needs is taken into account and an agreement reached on any trade off that is needed between conflicting requirements.
These requirements are critical to a successful sourcing outcome because they are a key input to a number of steps in the sourcing process. These include:-
o Deciding on the evaluation criteria to be sued in selecting the preferred supplier
o Testing your sourcing options so that the one that most closely meets your organisation's overall needs is chosen
o Developing the most relevant performance measures to include in the contract
o Deciding whether circumstances have changed so much that the sourcing strategy needs to be re-visited
You can develop and document your business requirements using the framework below.
o Gather as much data on the future direction of your organisation as you can so that you can test that your business requirements match the needs of the organisation. This includes corporate and business unit strategies, policy statements, business plans and technology plans.
o Identify and meet with all of the stakeholders to understand and challenge their perceived needs in order to separate needs from wants and to understand their priorities.
o Challenge the needs to make sure that you are not just replicating the previous solution.
o Consult with as many people as possible who have a role to play in the acquisition or use of the product or service and make sure that there are no changes that they know about to technology and processes that may change the requirement.
o Share the summary of all of this analysis so that a consensus can be reached that accommodates everyone's need and buy-in can be achieved.