ENGAGEMENT
ENGAGEMENT
87%of SRM leaders get support from business and operational colleagues Fig. 9. How engaged and supportive of SRM are your business and operational colleagues?
SRM followers struggle to get the highest levels of supplier support Fig. 10. How would you assess the level of engagement and support for SRM from your key suppliers?
Suppliers support leaders in SRM
SNAPSHOT ANALYSIS
Leaders in SRM put more effort into engaging suppliers, and it shows. Half of them get strong and active support and engagement from suppliers – 23 percentage points more than any other group. At the same time, just over half of the leader and fast follower groups say suppliers are supportive of SRM. Working with clients, State of Flux has found suppliers are generally strong supporters of SRM. But because supplier engagement is a vital ingredient to success in SRM, this support should not be taken for granted. FMCG and IT firms look to have the most supportive and engaged suppliers although the IT sector edges it with the greatest strong and active engagement and support at 24%. A legacy of price-only negotiations in the FMCG sector may prevent it from getting the highest level of supplier support for SRM.
Procurement teams assume suppliers will jump at the chance of being part of an SRM programme, but sometimes they do not. Suppliers may have seen SRM before. Indeed suppliers might have seen two or three incarnations of SRM that have failed to gain traction or result in the kind of change anticipated. Putting effort into a programme, only to see it go nowhere will discourage suppliers and make them cynical about the motives, especially if they don’t see meaningful change in relationship hygiene factors such as invoice processing and payment, or are screwed down on price during the next round of tendering. To lay the foundations for SRM, procurement people need to be as serious about engaging external stakeholders as they are those inside their organisation.
Leader
Fast follower
Follower
Leader
Fast follower
Follower
Strong and active engagement and support
Strong and active engagement and support
32%
50%
18%
27%
6%
12%
Supportive
Supportive
55%
50%
SRM engagement held back by other business priorities
58%
59%
45%
57%
Almost half of SRM leaders report there being no barriers to c-suite support and engagement in SRM, but insufficient awareness of the value proposition and other business priorities tend to make the c-suite less engaged and supportive of SRM in the groups fast followers and followers. Across all groups, it is insufficient awareness of the value proposition that holds back senior level engagement with SRM, demonstrating the vital connections between the Value and Engagement pillars of SRM. The UK government’s Cabinet Office is leading a cross-department SRM programme and is putting engagement with operations and suppliers among its top priorities (see Engagement case study on page 40). Getting an SRM programme off the ground and sustaining it is a big challenge. Engagement across all stakeholder groups is essential, not only at the start, but also to promote success throughout the programme.
Neutral
Neutral
0%
0%
20%
13%
36%
27%
Some opposition
Some opposition
14%
0%
5%
1%
11%
3%
Strongly opposed / resisting
Strongly opposed / resisting
0% 0%
0% 0%
1%
1%
FMCG and telecoms firms receive the greatest support fromsenior management. Fig. 8. How engaged and supportive of SRM are your senior management and executives (sectors)?
Financial service
FMCG / CPG
IT / high tech
Oil & gas
Public sector
SNAPSHOT ANALYSIS
Telecommunications
Utilities
It is the old Catch-22 of SRM: the business is too busy with other priorities to engage with it but does not know SRM is a tool to help fix its most pressing problems. Reducing cost, managing risk, product innovation, access to new markets and greater sustainability can all be achieved by forging the right relationships with the right suppliers. All groups struggle in this regard, but followers more so than any other: 67% find other business priorities get in the way of engagement. At the same time, 58% of them find there is insufficient awareness of the value proposition for SRM. It’s likely these two struggles are linked.
0% 20% 40% 60% 80%
Neutral
Some opposition
Strongly opposed / resisting
Strong and active engagement and support*
Supportive
36
STATE OF FLUX
2018 GLOBAL SRM RESEARCH REPORT
37
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