TECHNOLOGY
TECHNOLOGY
IT business case impact
Percentage of respondents agreeing with reported benefits originating from effective supplier management technology
(all respondents)
opinion State of Flux
Business case has been created Business case has not been created
(all respondents)
Supplier performance management and improvement
Don't know ROI
30%
78%
Up to 2% ROI
Risk identification and management
3%
68%
2-4% ROI
One place to manage suppliers
3%
65%
4-6% ROI
Supplier management oversight
1%
With such a big focus on these activities, one could say that digitisation is no longer a source of competitive advantage, it is merely an attempt to catch up with competitors who may already be ahead of you on the maturity curve. In other words, digitisation is no longer an option, it is a must if your organisation wants to remain competitive. Supplier management is an often overlooked yet highly strategic pillar of any successful operation. Like other key elements, it too needs to keep up with the challenges of our times and drive digitisation in order to become leaner, more productive, more transparent, less error-prone, and at last, to offer an improved end- user experience. When we talk about procurement as an area of focus, there are a few areas of the source-to-pay process in particular that we see as more commonly lagging behind in an organisation's digitisation journey.
As we review the findings of this year's research it is mid-2021 and the world is still trying to tackle the unprecedented challenges presented by the pandemic. The outbreak and spread of the Covid-19 coronavirus has proved how fragile our business operations and our supply chains can be without carefully planned and successfully executed operational redundancies and resilience. However, the pandemic also highlighted how agile businesses can cope with any uncertain situation and use all the intelligence and resources available to overcome them. Covid-19 has indeed revolutionised the way businesses work, with a lot of organisations pivoting to new digital business models, remote working becoming a reality and a reignited interest in digitising, simplifying and – where possible – automating data, processes and workflows.
64%
More than 6% ROI
Information management, sharing and reporting
2%
64%
Business case has not been created
62%
Value capture and delivery
63%
Satisfaction
out of IT systems that support various supplier management activities. When asked whether their organisations have documented a business case for the primary IT systems used to support the supplier management lifecycle activities, 62% responded negatively. What is even more concerning is that a remaining 30% that answered positively, are not able to quantify the benefits generated from the deployed IT solutions. Only 8% of respondents were able to quantify the financial ROI, with this ranging between 2% and 6%.
Compliance and regulatory
54%
By examining the different types of IT systems organisations use for various aspects of supplier management, we are able to gauge their extent of IT maturity and cross-reference it against levels of satisfaction. On the low end, we have organisations with very low IT maturity, meaning lack of IT systems and/or wide use of tools such as Excel, SharePoint and Teams to support supplier management activities. At the other end of the spectrum, we have organisations with various dedicated systems supporting the majority of key supplier management activities. As expected, there is a strong correlation between an organisation’s level of IT maturity and the perceived satisfaction of the end-users. Level of end-user satisfaction displayed against level of IT maturity; satisfaction ranges from 0 for extremely dissatisfied, and 10 for extremely satisfied
Manage sustainability and CSR in the supply chain
43%
Identify, capture and deliver supplier innovation
40%
Team productivity
These are:
33%
> Supplier due diligence and on-boarding
Virtual team working
DIGITISATION IS NO LONGER A SOURCE OF COMPETITIVE ADVANTAGE, IT IS MERELY AN ATTEMPT TO CATCH UP WITH COMPETITORS WHO MAY ALREADY BE AHEAD OF YOU ON THE MATURITY CURVE.
21%
> Supplier relationship management
Benefits of effective supplier management technology
> Contract lifecycle management
During this year’s research, we asked participants to identify the top advantages their organisation’s get from having effective supplier management technology in place. As is demonstrated in the accompanying chart, most identified performance management as the primary benefit (78%), with risk identification and management flagged as the secondary benefit (68%). A high percentage of respondents also highlighted benefits related to oversight, transparency, and the ease of managing every supplier from a single system.
> Supplier risk management
> Supplier performance management
> Supplier ESG [environmental, social and governance] risk management
To learn more about our technology solution, SupplierBase, contact enquiries@stateofflux.co.uk
The business case for IT systems
This year’s research raises concern around the creation of business cases for the purchase, development and roll-
7 8
7 9
STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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