ENGAGEMENT
ENGAGEMENT
68% THE LEVEL OF ENGAGEMENT SRM LEADERS ENJOY WITH THE TOP MANAGERS
50% OF SRM LEADERS GET STRONG SUPPORT FROM SUPPLIERS
22% OF SRM FOLLOWERS SAY LACK OF BUSINESS CASE HOLDS BACK SRM ENGAGEMENT
Summary
Lack of support from business and operational colleagues could stall SRM
Leaders and fast followers in SRM get more support from business and operational colleagues than the follower group. For example, 32% of leaders say they enjoy strong and active support, and 18% of fast followers get the same. More than half of both groups feel these stakeholders are supportive. But there is a danger of complacency setting in. Engagement in SRM from operational and business colleagues is significantly lower than from senior management and executives. Too much focus on engaging with the top team at the expense of business and operational colleagues may be storing up the potential for the programme to ‘stall’ when it is implemented on the ground. As a result, organisations can struggle to sustain such projects in the long term.
At 68%, the level of engagement leaders in SRM enjoy with the top team is more than six times that of SRM followers.
Supplier relationship management depends on the beliefs and actions of many stakeholders outside procurement’s control. Leaders in SRM significantly outperform the rest of the field in engaging all stakeholders. Starting from the top. 68% of them say they receive strong and active engagement from senior management and executives, six times the level of engagement SRM followers enjoy. With business and operational colleagues, the data shows a similar pattern. The worry for SRM followers is that 32% get a neutral response from these stakeholders, creating the risk projects stall once they are rolled out to the business. All groups find other business priorities and difficulty expressing the SRM value proposition hold back engagement with SRM. However 45% of leaders find that there are no barriers to engagement with c-suite executives, more than twice the result for fast followers and four times higher than the figure for SRM followers.
It is a subtle thing, engagement. It is the difference between sending an email, and the recipient caring about it enough to act. SRM relies on engagement to succeed because employees outside procurement may face the majority of interactions with suppliers. Finance and operations probably talk to vendors more often than category managers. And research, engineering or marketing teams will judge, and add value to whatever the supplier provides. Meanwhile, heads of department and c-suite executives are responsible for signing off supply contracts and setting the strategic direction of the relationship. From the top of the organisation downwards, all these people should be engaged, as should suppliers. A disinterested vendor can spell disaster for SRM.
Leaders get the highest level of strong and active engagement from the senior team. Fig. 7. How engaged and supportive of SRM are your senior management and executives?
SRM leaders prove the importance of engagement with senior managers and executives
Leader
Fast follower
Follower
Leaders in SRM are more than twice as likely to be receiving strong and active support from senior managers and executives compared with fast followers. And at 68%, the level of engagement they enjoy with the top team is more than six times that of SRM followers, only 11% of whom feel senior management is supportive. Different sectors vary in how they work with suppliers. Fast moving consumer goods (FMCG) firms enjoy a higher level of support from senior management (at 67%) than any other sector. However, it is the telecoms sector that receives the highest level (39%) along with IT / High Tech (33%) for the all-important strong and active support from senior management and executives, presumably because of the strategic nature of some supplier relationships in these sectors. FMCG firms, utilities and the public sector organisations all struggle to move from just ‘support’ to the more meaningful and potentially game- changing ‘strong and active support’ for SRM from the senior team.
Strong and active engagement and support
68%
33%
11%
Supportive
27%
58%
48%
Neutral
5%
8%
33%
Some opposition
0%
2%
From top to bottom of the organisation, all relevant stakeholders must be engaged, as should suppliers. A disinterested vendor can spell disaster for SRM.
7%
Strongly opposed / resisting
0% 0%
2%
34
STATE OF FLUX
2018 GLOBAL SRM RESEARCH REPORT
35
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