BUSINESS DRIVERS & VALUE
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
50
HOW DO TANGIBLE BENEFITS TRANSLATE TO FINANCIAL VALUE? As indicated by the feedback on specific areas of progress featured on page 29, measuring and reporting SRM benefits remains a challenge. Assigning a financial worth to reduced risk, supply continuity in difficult times, retaining the best project manager or creative talent is almost impossible. However, other aspects of SRM do create more measurable financial outcomes. Our question asked what is the average post- contract financial benefit you have achieved as a result of SRM activity. Post-contract financial benefits equating to more than 4% are being reported by 25% of all respondents as a result of their SRM activity. Note: The financial benefits reported against this question are subject to many variables based on the way in which individual organisations track benefits, report and apportion savings, etc. Nonetheless, the indicators are that a strong financial return on investment in SRM is being achieved where it is being deployed effectively.
Figure 1.8. Post-contract financial benefits – all respondents
MORE THAN 8%
6.1% TO 8%
4.1% TO 6%
2.1% TO 4%
0.1% TO 2%
0%
DON'T KNOW
0% 10% 20% 30% 40% 50%
© 2014 State of Flux
LEADERS REAP THE FINANCIAL BENEFITS
Figure 1.9. Post-contract financial benefits – leaders / fast followers / followers
For leaders, the proportion reporting financial benefit in excess of 4% rises to 46% and for fast followers and followers, 34% and 21% respectively. Linked once again to the challenge around measuring and reporting SRM benefit is the number of organisations who don’t know what financial benefit they are achieving as a result of SRM initiatives. Even amongst leaders this figure is high at 24%.
○ MORE THAN 8% ○ 6.1% TO 8% ○ 4.1% TO 6% ○ 2.1% TO 4% ○ 0.1% TO 2% ○ 0% ○ DON’T KNOW
LEADER
FAST FOLLOWER
FOLLOWER
0% 10% 20% 30% 40% 50%
© 2014 State of Flux
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