2014 Global SRM Research Report - Customer of choice

BUSINESS DRIVERS & VALUE

STATE OF FLUX

2014 GLOBAL SRM RESEARCH REPORT

Figure 1.0. Very important and important business drivers for SRM – all respondents

○ VERY IMPORTANT ○ IMPORTANT

IMPROVING END CUSTOMER EXPERIENCE IMPROVING YOUR COMPETITIVE ADVANTAGE QUALITY IMPROVEMENTS SERVICE LEVEL IMPROVEMENTS COST AVOIDANCE RISK MANAGEMENT / REDUCTION COST REDUCTION

GETTING PREFERRED ACCESS TO SCARCE MATERIALS AND CAPACITY SUPPORTING YOUR SUSTAINABILITY AND CSR GOALS JOINT PRODUCT / SERVICE DEVELOPMENT IMPROVING SPEED TO MARKET SUPPORTING SALES / REVENUE GROWTH IMPROVED ACCESS TO BEST SUPPLIER RESOURCE BETTER CONTRACT COMPLIANCE SUPPLY CHAIN EFFICIENCY SUPPORTING IMPROVED PROFIT MARGINS SUPPLIER INNOVATION

20%

40%

60%

80%

100%

Figure 1.1. Developed and documented a clear value proposition or business case for SRM – leaders / fast followers / followers

Figure 1.2. Proportion of impacted (by SRM) stakeholders that understand and are actively supporting the value proposition – leaders / fast followers / followers

0% 10% 20% 30% 40% 50% 60% 70% 80%

○ YES ○ NO ○ DON’T KNOW

Don't know No Yes

○ ALL ○ MAJORITY

○ SOME ○ NONE

LEADER

FOLLOWER FAST FOLLOWER

LEADER

FOLLOWER FAST FOLLOWER

BUSINESS DRIVERS

A clear value proposition or business case for SRM has been developed and documented by almost 70% of leaders and fast followers, and 48% of followers ( figure 1.1 ). Across other respondents the proportion is just 32%.

Respondents still report that SRM is an effective vehicle to deliver a wide range of business drivers ( Figure 1.0 ). Last year, risk reduction emerged as the most important business driver. This year, cost reduction has re-emerged as the business driver considered the most important, with 88% of respondents classing it as important or very important. This was closely followed by risk with 85%.

COMMUNICATING THE VALUE PROPOSITION

Of the companies that have developed their SRM value proposition, less than 50% report that it is understood and actively supported by the majority of the impacted stakeholders. Figure 1.2 illustrates that the engagement with stakeholders on the value proposition amongst leaders and fast followers is far more advanced than the followers and also the wider group of respondents.

THE IMPORTANCE OF THE SRM VALUE PROPOSITION

The SRM value proposition is the starting point for any SRM programme. It will set the strategy; influence the design and focus of activities; and it is the primary vehicle for engaging stakeholders.