Executive summary
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
8
TEN SRM ESSENTIALS
6. Complete or revisit segmentation to ensure you are focusing your scarce resource on supplier relationships that will make the most difference. Build robust governance at each segmentation level. Ensure governance and process once built are comprehensively deployed, adopted and outputs measured. 7. Ensure the SRM role is properly defined and one that will attract the best talent. Invest in training to equip your people with the requisite behavioural and technical skills to manage all aspects of the supplier relationship. 8. Information is at the heart of relationship management. Become ‘masters’ of it and enable real collaboration by using technology. Connect the enterprise inside and out, with scalable, secure and accessible supplier management technology that is integrated. 9. Take a proactive approach to relationship development by sharing information to promote openness, transparency and trust. Seek opportunities to collaborate on a wider set of challenges. Look inside your key relationships for strategic and cultural alignment using a 360° assessment. Work with your key suppliers to produce a joint account plan. 10. Leverage sell side strategic account management (SAM). Look for the synergies in both parties seeking to create value and assure mutual benefits.
Our experience of working with companies to identify and develop their SRM opportunities, alongside our research, make us more confident than ever that SRM has huge untapped potential to deliver real long-term sustainable value. An aspect of that value which is often misunderstood and undersold is that of being a customer of choice. A company’s standing as a customer of choice, in particular with its critical suppliers, represents both risk and opportunity. If SRM is implemented effectively, it will without doubt make a positive contribution to a company being regarded as a customer of choice. However, there are clearly challenges that need to be overcome. Our call to action for companies seeking to implement SRM or improve existing capability, is to create a 12 month plan that will work across these 10 essentials: 1. Understand where you are now, and how your SRM definition and value proposition aligns to your company strategy and business drivers. Use this insight to shape and develop your SRM programme to deliver what the business needs. 2. Close the business drivers to benefits gap. Create strategies that focus on the most important business drivers and develop a collaborative approach with suppliers to drive benefits. 3. Capture and report both financial and non-financial benefits to demonstrate the business impact of SRM and create momentum in the business. 4. Engage proactively with all key stakeholder groups in a two-way dialogue. For internal stakeholders this involves not only ‘selling’ the SRM value proposition but also listening to their needs as customers of third party products and services. 5. Listen to suppliers. This means gathering data using a voice of the supplier survey to understand how they perceive you as a customer, how you compare with your peer group and your standing as a customer of choice. To fulfil its potential, SRM needs strong and active stakeholder engagement.
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