ENGAGEMENT
ENGAGEMENT
engineering, could have a big say in determining how a supplier’s product or service is received within your organisation or have a significant impact on future endeavours, so it is crucial they understand the importance of how to best interact with key suppliers.
Another encouraging view this year revolved around a dip seen across all categories for insufficient awareness of the value proposition/business case. Among Leaders, this dropped from 35% (2020) to 16% (2021). The same period saw drops among Fast Followers (42% to 32%) and Followers (56% to 45%). The vast majority of Leaders and Fast Followers have the support of their organisation’s top team. In response to the question ‘Do your senior executives understand the value a supplier management programme will bring to your organisation?’ 91% of Leaders and 90% of Fast Followers said they did. In the case of Followers it was just over half (56%). Analysing the results by industry we found that the Aerospace and Defence and Education and Research sectors came out on top (with 83% indicating senior executives understood the value of supplier management). Professional Services was close behind at 81%. At the other end of the scale, only 40% of executives in the Charities sector shared this view. Business and operational engagement and support This year’s results see step changes in the level of engagement and support from business and operational colleagues towards supplier management. All have seen growth since last year, suggesting that engagement with these stakeholders is paying off. Among Leaders, 93% reported support, of which 33% said it was ‘strong and active’ (i.e., understanding the supplier management approach and working/ behaving accordingly). Fast Followers also saw a rise in business and operational support to 83% (of which 18% said it was strong and active). Followers also reported an increase, with support climbing from 40% last year to 57% in 2021. Engagement with business and/ or operational colleagues is vital for several reasons. Some stakeholders – such as those in operations or finance – may speak to the supplier on a more regular basis than the supplier relationship managers. Furthermore, other teams, such as marketing or
Senior management/executive support for supplier management programmes
SUMMARY
Leader
Fast Follower
Follower
Strong and active engagement and support
Engagement is a crucial element in determining the success of supplier management programmes. Without full and active support, even those with the most robust business cases can fail. Engaging across three key areas can particularly help build support: 1) at a senior or executive level; 2) with business and/or operational colleagues; and 3) with suppliers themselves. We defined the question set to verify whether the improvement in senior management support we saw last year has continued. As with previous results, we see a clear split between those who gain the most value from supplier management through effective engagement – the Leaders, with Fast Followers marginally behind, and secondly, the Followers, who lag. All indicate that other business priorities are the main barrier to getting executive support. This significant gap, exhibited across executive/senior management, business/operational colleagues, and supplier support, is clear and noticeable, and an area of opportunity for the Followers going forward.
63%
Supplier engagement and support
37%
13%
Having direct and active engagement with the suppliers themselves is vital. After all, working together in a collaborative way is a staple part of good supplier management practice. It ensures suppliers can help more effectively tackle key elements such as contract, performance, and risk management together. In addition, engagement is an important building block to enable innovation and value creation. This year’s responses highlight two particularly interesting points. Firstly, both Leaders and Fast Followers report very high support levels of engagement with suppliers (at 96% and 93% respectively). This is consistent with the responses seen in previous years. The differentiator between the Leaders and Fast Followers is the proportion of respondents noting 'strong and active' support; 51% of Leaders and 30% of Fast Followers reported this. Secondly, we can see that Followers lag in this area. A total of 67% reported very high support levels but only one in 10 said it was ‘strong and active’. This indicates a clear opportunity for Followers to improve their approach to engaging key suppliers and reap the benefits of collaborating, which will help increase value to both organisations. When the supplier management approach is mature, suppliers understand the value it generates and become more supportive The majority of Leaders (94%) and Fast Followers (90%) have suppliers who understand the value of a supplier management programme. Among Followers, the ‘yes’ response drops to 52%, with a significant 12% responding that their suppliers do not understand the value a supplier management programme may provide. →
Supportive
36%
56%
50%
Neutral
1%
7%
30%
Some opposition
0% 0%
7%
Senior stakeholder engagement and support
to adopt a more robust and flexible approach in building the case for increased involvement of senior stakeholders in supporting any supplier management programme's execution and activities. Both, however, saw increases on previous years – with Leaders returning to above 60% for the first time since 2018. The results regarding the biggest barriers to gaining more senior management and executive support [see chart] were very interesting. Last year the top-rated response was procurement and supply chain not being high enough on the corporate agenda, this year, across all categories, the most popular response was that there were other business priorities. This may have been driven by issues brought to the fore by Covid-19, with its impact on business activity of increased visibility and immediate importance to resolve. Among the Leaders, this was the only response that scored higher than there being no barriers to obtaining senior/executive level support.
Barriers to getting more senior management/executive support for supplier management programmes
Engagement at a senior or executive level is key. Stakeholders at this level are often responsible for signing-off contracts and setting the strategic direction of relationships, either formally or informally through their influence. This year’s research shows us that both the Leaders (99%) and Fast Followers (93%) reported receiving significantly more support among their senior management and executives for supplier management than the Followers do (63%). However, there is a clear difference between the two: while 63% of Leaders said the support they received was ‘strong and active’ (demonstrated through personal involvement, behaviours and allocation of appropriate budget and resources), this shrank to 37% among Fast Followers. This indicates that, while supportive, they were more removed from supplier management activity. The finding suggests that Fast Followers have
99 %
(all respondents)
Other business priorities
OFLEADERSREPORT SENIORMANAGEMENTAND EXECUTIVESUPPORT
62%
Insufficient awareness of the value proposition/business case
62 %
38%
Procurement and supply chain is not high enough on the corporate agenda
OFRESPONDENTS IDENTIFIED OTHERBUSINESSPRIORITIES ASTHEMAINBARRIERTO SENIORMANAGEMENT/ EXECUTIVESUPPORTFOR SUPPLIERMANAGEMENT
31%
No barriers – our senior management and executive support is strong
20%
94 %
They see it as slow to implement and deliver benefits
OFLEADERSBELIEVE SUPPLIERSUNDERSTAND THEVALUESUPPLIER MANAGEMENTCANPROVIDE TOTHEIRORGANISATION
19%
Disagree with the concept
1%
4 1
4 0
STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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