TECHNOLOGY
TECHNOLOGY
Innovation and sustainability neglected in technology investment Fig. 34. For which aspects of the supplier management lifecycle do you have an IT system?
Supplier information management tops SRM technology priorities
SNAPSHOT ANALYSIS
Very few organisations are using technology to manage compliance with their sustainability standards (18%) or to better enable innovation (8%).
Not only do nearly half of organisations feel technology does not adequately support SRM, where support is lacking, it is the very basics of informationmanagement that are at fault. Procurement and supply managers are putting up with insufficient support from information technology. Why? Applications no longer require upfront capital investment. Cloud-based software can connect with ERP, supply chain and financial systems via common APIs, making integration and sharing data simpler and cheaper than ever. Whether procurement fails to make the case, or the business fails to see it is a moot point. But those that do invest will be at a strategic advantage.
The struggle to get hold of consistent supplier information, one of the basic must-haves in SRM, plays out in priorities for technology investment: 57% of respondents rank this ability as very important. Meanwhile, 54% of businesses we spoke to say contract management is very important when it comes to future technology investment. Performance management and benefits capture follow with 53% and 45% respectively. However, the lower ranking of solutions associated with risk and innovation perhaps betrays a lack of knowledge of the tools available on the market. Risk management is very important to only 39% of respondents while relationship management and collaboration (30%), innovation management (21%) and CSR/sustainability management (17%) seems to indicate that the significance of these activities is still not fully appreciated. The ability to manage, analyse and share information is fundamental to effective SRM. Technology can help achieve this efficiently and create a genuine shared workspace for oversight, collaboration and innovation. It is the catalyst that accelerates the growth in value both parties want to see from the supplier-buyer relationship.
Contract management
73%
Supplier on-boarding/master data
72%
Performance management
41%
SNAPSHOT ANALYSIS
The supply chain is paramount in ensuring sustainability. It is where you are likely to find environmental impact, risk of modern-day slavery and unethical working practices. But only 18% of organisations say they use technology to track supplier sustainability. Likewise, with innovation: only 8% of firms use technology to track and nurture supplier innovation, despite the fact most businesses know that’s where the next big ideas could come from. Taken together these findings suggest organisations may want to talk about innovation and sustainability, but few invest where it counts. Those that do will gain considerable advantage. Procurement people use a patchwork of DIY systems for a reason: 71% find the enterprise systems are disparate and not integrated when it comes to getting data to manage supplier relationships. Even when organisations have systems to manage supplier relationships, 63% of them say they lack features or functionality they need while 34% say they lack up to date information.
Risk management
37%
Relationship management
24%
For too long resourceful people in procurement have been capturing data in spreadsheets and storing on shared drives; practices that would be unheard of in other functions such as sales, finance or HR.
Manage supplier compliance to required sustainability standards
18%
Innovation management
8%
Systems used for SRM are disparate and lack integration for 71%of respondents
Supplier informationmanagement tops IT solution priorities Fig. 36. Given the scope for additional investment in IT solutions for the supplier management lifecycle in 2017 we asked companies what they considered were their priorities for an IT solution.
Fig. 35. Where IT systems support supplier management less than adequately, what are the main deficiencies?
Very important
Important
Nice to have
Not important
Systems are disparate and not integrated
71%
Supplier information management
Lack required functionality and features
63%
Contract management (supply side)
Performance management
Lack of up to date information
34%
Benefits capture and reporting
Organisations may want to talk about innovation and sustainability, but few invest where it counts. Those that do will gain considerable advantage.
Inaccessible to suppliers
32%
Supply chain risk management
Relationship management and collaboration
Inaccessible to internal stakeholders
23%
Innovation management
Other (please specify)
16%
CSR and sustainability management (supply side)
0%
20%
40%
60%
80%
100%
76
STATE OF FLUX
2018 GLOBAL SRM RESEARCH REPORT
77
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