2021 Global SRM Interactive Research Report

TECHNOLOGY

TECHNOLOGY

Percentage of organisations classified across five levels of ITmaturity

Type of primary IT systems used to support different types of supplier management activities

SharePoint and/or Teams still appear to be the go-to solution among those that utilise technology.

SUMMARY Effective use of technology continues to be a fundamental prerequisite for establishing a mature approach. It provides a framework for establishing standardisation, increased transparency and, to some extent, automation. Even though many organisations have started making good progress in adopting dedicated solutions to support or enhance various elements of day-to-day supplier management, a significant portion are lagging. While supplier on-boarding, contract management, performance and risk management are more regularly enabled by technology; less than one in five use systems to help manage relationships, innovation and sustainability. Furthermore, generic desktop tools, such as spreadsheets, are often deployed. The percentage that use such solutions ranges from 18% for on-boarding to as high as 40% for performance management. Fewer than three in 10 are mostly satisfied with how their IT systems support the supplier management lifecycle. This increases to six in 10 for organisations that have made a significant investment in establishing dedicated solutions across the entire spectrum of work. Lastly, most organisations appear to be unable to establish a business case for dedicated technology and those that have one appear to be struggling when it comes to monitoring and capturing the financial value generated from adopting fit-for-purpose tools. Until organisations can supplement their proposed use of IT systems with a valid business case and measurement of their ROI, it will be difficult to win agreement for subsequent upgrades.

(all respondents)

3rd party system / solution In-house system / solution Excel / SharePoint / Teams No system is used

Lack of supporting systems

Very low maturity 12%

A significant percentage of respondents report that their organisations do not employ dedicated systems or technology to support vital supplier management activities. For work such as supplier on-boarding, contract, performance and risk management, the number without an IT system or solution to help ranged from 10% to 20%. This number is mainly driven by organisations that are lagging compared to the competition when it comes to their supplier management. More alarmingly, our research found that four out of 10 do not use any technology to help them perform one of the most strategic elements of supplier management, relationship management. Furthermore, activities that many organisations struggle to manage, including innovation and sustainability, are also left with minimal technological support, with 61% and 48% of the respondents not employing any IT system.

Low maturity

Supplier on-boarding / master data

27%

48%

Medium maturity

22%

18%

30%

12%

High maturity

Contract management

21%

50%

Very high maturity

18%

22%

10%

10%

Performance management

18%

22%

40%

20%

Risk management

29%

20%

33%

18%

Relationship management

Industry maturity

11% 11%

The use of dedicated systems

SharePoint, and/or Teams to support supplier management activities. These tools appear to be commonly used for activities such as performance management (40%), relationship management (39%) and risk management (33%) across all maturity levels. However, since they are not specifically designed to manage supplier relations they often lack key features provided by dedicated systems. In our view they particularly struggle when it comes to usability, transparency and auditability. When it comes to more mature areas of supplier management, such as supplier on-boarding and contract management, the percentages of respondents using these systems drops to 18% and 22% respectively. For less developed areas of supplier management such as innovation or sustainability, approximately one quarter of the respondents utilise such solutions. However, it is noteworthy that for these two types of activities, Excel,

78 %

39% 39%

The use of dedicated systems can be closely linked to the level of maturity in an organisation’s supplier management approach. The following chart highlights the top industries employing such solutions, as well as those lagging in their technology adoption journeys. As expected, certain industries are ahead in the particular types of activities that are critical to their operational success. For example, those in the Financial Services sector excel at the adoption of risk management solutions, Professional Services organisations are strong on the adoption of relationship management systems; and Pharmaceuticals are typically superior at adopting tools for innovation. When it comes to the stragglers, some sectors appear on the list across multiple types of activities, including Travel & Leisure, IT & Telecoms & Media, and Aerospace & Defence.

Supplier on-boarding and capturing and maintenance of master data, together with contract management appear to be the most common types of supplier management activities that are supported by dedicated IT solutions. Two-thirds of respondents reported that they employ either third party or in-house solutions. When it comes to performance and risk management, the number of respondents using dedicated IT solutions decreases to 40% and 49% respectively. Activities such as relationship, innovation and sustainability management appear to be the least supported areas with the percentage of respondents utilising dedicated systems dropping to 16-25%.

Level of end-user satisfaction displayed against level of IT maturity; satisfaction ranges from 0 for extremely dissatisfied, and 10 for extremely satisfied (all respondents)

Innovation management

OFRESPONDENTS INDICATEPERFORMANCE MANAGEMENTASTHE PRIMARYBENEFITOF SUPPLIERMANAGEMENT TECHNOLOGY

6%

10%

23%

61%

CSR/Sustainability management

61 %

16%

9%

Very low maturity 3.4

27%

48%

HAVENOTDOCUMENTED ABUSINESSCASEFOR THEIRPRIMARYSUPPLIER MANAGEMENT ITSYSTEM

Low maturity

4.3

Medium maturity

40 %

5.2

High maturity

The use of Excel/ SharePoint/ Teams

5.8

ALARGENUMBEROF RESPONDENTS (40%) DONOT USEADEDICATEDSUPPLIER MANAGEMENTTOOL

Very high maturity

A significant number of organisations continue to use solutions such as Excel,

6.6

7 6

7 7

STATE OF FLUX

2021 GLOBAL SRM RESEARCH REPORT

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