The Sourcing Tree is a representation of a categorisation of your purchases. It’s a key component of a Strategic Sourcig approach and enables executing your spend analysis and project prioritisation.
There’s nothing better than an example to explain what it is, so below is a sourcing tree (well, only a part of it) related to one of the 4 core-families of purchases, the ‘Services’.
Even if a Sourcing Tree is highly ‘customisable’, depending your company business sector and specificities, it is really helpful and it saves a lot of time to start building the ‘Tree’ with a model (a simple one) and not from scratch. Creating the tree is a long and time-consuming process, whatever you do.
I’ll try to post one soon. If you do have good categorisation models, let me know, I’ll post it.
If this is something you want to do on a regular base, you should better look right away after a ‘spend management’ tool. You will not avoid building your tree the first time, but afterwards you ‘ll get a powerful tool to analyse data in the future and you will save enormous time and effort.