2014 Global SRM Research Report - Customer of choice

STATE OF FLUX

2014 GLOBAL SRM RESEARCH REPORT

RELATIONSHIP DEVELOPMENT & CULTURE 185

Analysis

Figure 6.18. Companies using a 360° relationship assessment approach – leaders / fast followers / followers

0% 10% 20% 30% 40% 50% 60%

○ YES ○ NO ○ DON’T KNOW

LEADER

FAST FOLLOWER

FOLLOWER

STRATEGIC AND CULTURAL ALIGNMENT

OPENNESS AND TRANSPARENCY

While most companies acknowledge the importance of strategic and cultural alignment, relatively few are taking real steps to understand these aspects of their key relationships in a more qualitative and quantitative way ( figure 6.18 ). This is borne out by the feedback that reveals only a third of companies conduct any kind of 360° relationship assessment which suggests a distinct lack of curiosity in to the real nature of key relationships.

Sharing strategic information with key suppliers is mutually beneficial in a direct business sense and also as a very tangible way to demonstrate openness and trust in a relationship. This feedback indicates that there is still a lot of scope to share information beyond the traditional operational. We believe that a reluctance to share information will quickly undermine confidence in relationships. Organisations need to make conscious choices about what information to share, rather than default to a share nothing position. Technology presents an excellent opportunity to share information effectively, efficiently and in a controlled and consistent fashion.

TRUST

Trust is acknowledged as the key component in successful relationships. Through our ongoing dialogue with both buy and sell side companies, it is evident how important trust is. Both parties want to be able to trust the other. Therefore this can only come about if both parties are not only trusting (of the other) but also trustworthy (reliable). Reliability is the key to becoming trustworthy. Trust is very hard to measure. It is something that is either won or lost as a result of actions. Trust is reflected in a number of the key components of SRM. For example 93% of our respondents indicated that establishing trust was an important part of SRM. Two other components of effective SRM are openness and transparency and collaboration. Neither of these can exist without trust. For example we can’t benefit from sharing information more freely if we don’t trust the information, and we can’t collaborate effectively if we don’t trust our collaborators or feel they are unreliable.

INNOVATION

Harnessing more supplier innovation continues to be a challenge despite some improvement. It remains one of the most important aspirations and business drivers for SRM programmes. Unless determined steps are taken to develop an innovation strategy and process, the opportunity could be missed. Evidence that organisations within industry sectors that are first movers in this area undoubtedly have a huge opportunity to improve competitive edge. In addition, harnessing the supply chain for innovation can result in significant R&D saving.