2014 Global SRM Research Report - Customer of choice

STATE OF FLUX

2014 GLOBAL SRM RESEARCH REPORT

BUSINESS DRIVERS & VALUE 47

SRM essentials

THE IMPORTANCE OF THE VALUE PROPOSITION

While the core elements of the value proposition remain constant, the emphasis placed on certain activities can be aligned in three ways: 1. The needs of the overall business strategy and goals related to where it is in the business cycle 2. The needs and priorities of specific business units or functions 3. The needs of individual stakeholders This doesn’t mean rewriting the value proposition for each, but simply to take these into account when communicating. Another factor to consider when preparing the value proposition is how it aligns to the business cycle and whether the company is growing, in steady state or experiencing challenges. These conditions will mostly be reflected in the business strategy and goals, but when changes occur within the usual planning cycle, it is worth being aware of these developments to keep SRM relevant.

The value proposition for SRM is a key component. Treated as a business case, it should address all the questions of value, benefit, risk and return on investment. If skillfully constructed, correctly positioned and supported by good communication, it will be the single most important vehicle for gaining stakeholder engagement and support for SRM. The evidence from figure 1.1 reveals that even when the value proposition is created, how effectively it is communicated and ‘sold’ to stakeholders is a key success factor. Figure 1.2 clearly reveals the correlation between SRM leaders and fast followers, and the degree to which they have communicated and gained stakeholder acceptance of the value proposition. When constructing the SRM value proposition, consider how it is aligned to the business strategy and objectives. This is essential to both ensure the effort invested in SRM has the maximum direct impact on business performance and it resonates with all impacted stakeholders.

GROUP COMPANY B Key business objectives

FUNCTION C Key business objectives

THE BUSINESS CYCLE

GROUP COMPANY A Key business objectives

FUNCTION D Key business objectives

SRM VALUE PROPOSITION

STRATEGY PRODUCTIVITY COST REDUCTION INNOVATION MICRO TUNING

STRATEGY PRODUCTIVITY COST REDUCTION INNOVATION

STRATEGY PRODUCTIVITY COST REDUCTION INNOVATION FINE TUNING

INITIAL TUNING