BUSINESS DRIVERS & VALUE
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
52
MEASURING SUCCESS
Figure 1.10. Measures for the success of SRM programmes – all respondents
While businesses have an understandable interest in direct financial benefit, this is not the only way to measure the success of an SRM programme. Indeed if it was, it would be likely to drive behaviours opposite to what is required for SRM to be successful. Figure 1.10 shows the metrics organisations use to measure the success of SRM programmes. The result provides an interesting mix of hard financial measures and softer, customer satisfaction metrics. Close to 50% of companies using internal stakeholder and supplier feedback is an encouraging sign. Below are examples of measures and success used by individual respondents. They indicate not only diverse measures, but more evidence of the broad impact SRM can have. It’s also worth noting the number of performance and operational metrics used to measure SRM. This topic is explored in more detail in the article ‘back to basics – SRM or SPM’ on page 33. Over-performance against SLAs / contract. Head of Procurement – UK professional services company Metrics such as contracts complete and valid, number of supplier business reviews, supplier risk assessment completion, and scorecards. Senior Project Manager – global telecoms network business
OTHER FINANCIAL BENEFITS (PLEASE SPECIFY) OTHER (PLEASE SPECIFY) CONTRIBUTION TO SUSTAINABILITY / CORPORATE RESPONSIBILITY GOALS NUMBER OF JOINT PROJECTS / INITIATIVES UNDERTAKEN NUMBER OF SUPPLIER IDEAS / INNOVATIONS IMPLEMENTED NO METRICS CURRENTLY USED NUMBER OF SUPPLIER IDEAS / INNOVATIONS RECEIVED JOINT VIEW OF RELATIONSHIP ATTRIBUTES (360 DEGREE ASSESSMENT) LEVEL OF SUPPLY CHAIN RISK POST CONTRACT COST AVOIDANCE SUPPLIER FEEDBACK / SATISFACTION INTERNAL STAKEHOLDER FEEDBACK / SATISFACTION POST CONTRACT FINANCIAL SAVINGS
0% 10% 20% 30% 40% 50% 60%
© 2014 State of Flux
Informal comments from senior stakeholders and suppliers. Senior Commercial Manager – UK online retailer
Stakeholder satisfaction. Contracts Manager – Australian energy company
Joint account / relationship plans in place. Head of Vendor Management – international oil and gas company Lower stocks, longer payment terms, innovation days, joint CSR projects. Vice President, SupplierManagement & Sustainability – international healthcare company Mutual benefits from the relationship. Head of Outsourcing & Supplier Governance – Australian financial services company Voice of the supplier score. General Manager, SRM – Australian telecom and technology company
Quality improvement. Procurement Operations Manager – global FMCG company
Supplier responsiveness and collaboration, internal process
compliance, and internal collaboration. Procurement Manager – global FMCG company
Compliance with the minimum standards for third party contract management. Sourcing Relationship Manager – large UK insurance company
Powered by FlippingBook