We can all agree that ‘good’ governance is important. In the highly competitive, rapidly changing, increasingly complex and risky business environment in which enterprises operate today, the need for ‘good’ governance has never been more acute. The larger the organization, the more diversified its business lines, the more geographically dispersed its operational footprint, and the greater the number and spread of their third parties, the more critical the need. But what does ‘good’ governance look like?

Over our twenty years in the sourcing advisory space working with hundreds of clients, Neo advisors have worked with only a few enterprises that have recognized this need and established a good governance program. In our experience, the vast majority today are lagging far behind this ideal. Often, we encounter organizations that have the bare minimum dedicated team and/or inadequate tools to support basic sourcing governance imperatives. Alternatively, we have worked with many clients that have invested in a governance function, unfortunately, its sole focus is on core transactional aspects such as contracting and performance monitoring. While this may be a good start, a good governance program needs to be much more comprehensive and robust.