Supplier relationships in the new technology landscape · DIGITAL SRM Supplier relationships in the new technology ... Supplier Relationship Management ... relationships in the new

1© 2015 State of Flux Ltd

DIGITAL SRM

Supplier relationships

in the new technology

landscape

State of Flux 2016 global SRM research report

SRM TECHNOLOGY BY

2© 2016 State of Flux

Head quartered in London and with offices in Sydney, Melbourne, Auckland, Zurich, Athens and Chicago, State of Flux has been supporting clients in procurement for over 12 years.

Supplier Relationship Management

Contract Lifecycle Management

Sourcing and Category Management Con

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Consultancy and research services

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www.statess.com

http://www.statess.com/


OUR CREDENTIALS


2006 to 2016 A PERIOD OF UNPRECEDENTED GLOBAL CHANGE

Economic fortunes of individual countries and the wider world have changed

The platform on which economic success is based has changed for many countries and companies

Emerging economies / stalled economies / crashed economies / re-emerging economies

Geo-political upheaval

The way we work – the way we play – the way we live

Technology has played a vital role in this change

Catalyst and instigator of change

Enabler for change


SUCCESS IN 2017 AND BEYOND

To survive and to thrive, companies must become more innovative: in products and services; in their relationships with customers; and

in their processes and business models.

Successful companies in 2017 and beyond will need to innovate and execute

Relationships with suppliers will be vital to both

Innovation is more than just ideas

An idea remains just an idea until it results in change


Tactical buying

Strategic sourcing

Category management

SRM

1980’s 1990’s 2000’s 2010’s

THE EVOLUTION OF PROCUREMENT

Buying office

1970’s

Proving the toughest

transition?


?

2009

2010

2011

2012

2013

2014

2015

8 years

Over 1500 different companies

Over 750,000 data points

SUPPLIER RELATIONSHIP MANAGEMENT(SRM) GLOBAL RESEARCH

2016Published in

October

SRM

Supplier relationshipsin the newtechnologylandscape


2016 GLOBAL SRM RESEARCH

More than 25 industry sectors represented

275 respondents

55%

16%

22%

5%

1%

1%

NORTH AMERICA

EUROPE

LATIN AMERICA

AUSTRALASIA

ASIA

AFRICA

STATE OF FLUX OFFICES


SIX PILLARS OF SRM

We’re able to assess maturity across these six key areas

VALUE

STAKEHOLDERS

GOVERNANCE

TECHNOLOGY

COLLABORATION

PEOPLE

VALUECO-CREATION


2016 SRM global maturity and benchmarking

1.6

FOLLOWERS OTHERS

+ 0.3 + 0.3 + 0.2

LEADERS

2016 SRM INDEX1.63.14.5

Change since 2015

Leaders

Followers

Others


What has been the most stubbornly consistent feedback?

2012 to 2016 SRM global maturity and benchmarking

2012 2016


WHAT OUR RESEARCH REVEALS

• Cost reduction and avoidance• Risk reduction• Supplier innovation• Operational improvement• Supplier preferential treatment

95% of leaders have created a value proposition

10% of respondents are reporting post-contract

financial benefits of more than 6% while a another

20% claim over 4%

Benefits realised

A good value proposition is key.

Top 5 business drivers for SRM



55% of leaders report strong and active support

from senior management

Senior stakeholder support

60% of companies say their CEO is supportive of

SRM but only 17% say they are actively involved.

Business and operational support

While over 70% claim to have support only 10%describe it as strong and active

Supplier are stakeholders too

Support for SRM is strong in around 80% of suppliers

Its higher for leaders at 95% who are also more likely

to have carried out a Voice of the Supplier



87% of companies have segmented their suppliers

Working with the right suppliers

Most segmentation is objective but doesn’t sufficiently involve the business

Only 36% of firms have contract management in

place for the majority their key suppliers

50% of firms are failing to embed effective

performance management

Just 48% of companies believe they have effective

risk management in place for more than half their key suppliers

Foundations of good supplier management



Outside of leaders and followers, only half of

businesses have yet to define the SRM role.

The role, skills and training

SRM leaders are far more likely to have investedin skills development

Leaders are almost twice as likely to treat SRM as a

dedicated job.

Strategic thinking and Influencing top the SRM skills

shopping list

A big gap exists between training demand and supply

in some of the key SRM skills areas



Less than half of businesses share company strategy

with suppliers and only 38% talk about end customer

needs

Openness and transparency

3/4 of businesses say they are looking for supplier

Innovation but only 1/3 have an effective innovation

management process in place and less than 1 in 10use technology

Innovation

Only 30% of businesses conduct 360° reviews of

alignment and compatibility

Only 40% of companies create joint business plans with

key suppliers

Alignment


“Little of the post-contract supplier management landscape is enabled by technology”State of Flux global SRM research report 2016


2016 TECHNOLOGY QUESTIONS

Supplier management activity regarded as important or very important to be enabled by technology [IT’S IMPORTANT]

SUPPLIER INFORMATION MANAGEMENT

CONTRACT MANAGEMENT (SUPPLY SIDE)

PERFORMANCE MANAGEMENT

BENEFITS CAPTURE & REPORTING

CSR & SUSTAINABLILITY MANAGEMENT

INNOVATION MANAGEMENT

SUPPLY CHAIN RISK MANAGEMENT

RELATIONSHIP MANAGEMENT & COLLABORATION

SUPPLIER MANAGEMENT ACTIVITYIT’S

IMPORTANTGOT IT

CAPABILITY GAP

Supplier management technology solutions in place [GOT IT]

-21%

-47%

-48%

-57%

-72%

-76%

-76%

-84%

85%

77%

74%

68%

72%

56%

47%

43%

62%

41%

39%

31%

19%

13%

11%

7%


4%

36%

52%

9%

VERY STRONGLY ADEQUATELY POORLY VERY POORLY

Where you are using IT systems how well do they support supplier management?

Just 4% rate technology support for SRM as strong

Over 60% describe it as poor or very poor

Frustration is palpable – Poor functionality and usability of IT is highamongst the barrier to better SRM



Failure to get an effective post contract supplier management solutionon to the technology roadmap has resulted in a DIY culture using toolsthat are 15 years old.

63%

75% 50%

54% 20%



WHAT CAN TECHNOLOGY DO FOR SUPPLIER MANAGEMENT?

› Drive structure and consistency across the company, departmentally and geographically

› Change people's behaviour allow them to work using multiple devices, whether desktops, tablets or smart phones

› Create rigour in managing relationships and enable remote oversight

› Provide instant access to data describing performance and other interactions

› Analyse massive volumes of data

› Enable collaboration through seamless sharing of information within and across organisational boundaries

› Engage stakeholders via surveys and feedback

› Accelerate and deploy supplier innovation


The innovation dichotomy

50% of respondents say that more supplier innovation is an

important business driver behind improving SRM

75% of respondents say they are actively looking for supplier

innovation right now

Just 33% of respondents say they have an effective process

in place manage innovation

WHAT CAN TECHNOLOGY DO FOR SUPPLIER MANAGEMENT?


›You can’t force it

›You can create a better environment where it can flourish

›You can enable it better when it does – technology can help

› Share and manage information› Improve communication› Provide structure and rigour› Accelerate implementation

43% 7% 84%

Remember this?

WHAT CAN TECHNOLOGY DO FOR INNOVATION?


IS IT A MYSTERY WHY SUFFICIENT INVESTMENTIN SRM TECHNOLOGY HASN’T BEEN MADE?

Yes and No

Yes in that its almost unthinkable that any other business process with so much risk and value at stake wouldn't be fully enabled using technology

No in that many companies have not fully made the case for SRM and gained sufficient support from the C suite

MAKE THE CASE FOR SRM AND THE TECHNOLOGY BUSINESS CASE MAKES ITSELF

Thank you

SRM TECHNOLOGY IS

For more information or to book a demo visit the State of Flux stand or contact [email protected]

mailto:[email protected]

Documents

Supplier relationships in the new technology landscape · DIGITAL SRM Supplier relationships in the new technology ... Supplier Relationship Management ... relationships in the new