What is meant by sourcing strategy in contract management?

Sourcing strategy in contract management refers to a comprehensive and systematic approach focused on the effective procurement of goods or services. It encompasses the entire process of identifying, evaluating, and selecting suppliers, as well as determining the best methods to procure and manage those resources. A well-defined sourcing strategy aligns procurement goals with organizational objectives, considering factors such as cost, quality, reliability, and supplier capabilities.

This approach ensures that the right products or services are acquired at the right time and price while also fostering long-term relationships with suppliers and supporting the overall supply chain strategy. By emphasizing effectiveness in procurement, the sourcing strategy plays a crucial role in maximizing value, minimizing risks, and optimizing the use of resources within an organization.