SIXPILLARSOFSRM The State of Flux six pillars of SRM is a model for SRM excellence, developed and refined over the past 10 years. Many of the global businesses we have helped get value from SRM have adopted this approach. While there is the suggestion of a sequential approach, fundamentally each pillar is linked and dependent on the other so they are best approached in parallel and must all be tackled to get the most out of SRM.
COLLABORATION 6
TECHNOLOGY 5
PEOPLE 4
GOVERNANCE 3
VALUE
2
ENGAGEMENT
VALUE 1
1. VALUE
2. ENGAGEMENT
3. GOVERNANCE
How do suppliers help your business reach its strategic goals? And what more could they do? That’s the value proposition. Then it’s a question of measuring both the financial and non-financial value created. Maintaining a clear line of sight between the business drivers (your company’s strategic objectives) and the value that SRM is creating is crucial.
How do you get the C-level team behind SRM? How do you get buy-in from business and operational managers who deal with suppliers day-to-day? How will you engage suppliers more in the process? The answer to all three questions lies in a strategy for stakeholder engagement and support.
Business cannot invest time inmanaging all their suppliers in a strategic fashion. How they decide which ones are worth investing in is part of the governance process that underpins SRM. This in turn will drive the approach to creating value, level of engagement, meetings etc. It will also put in place a structure that ensures relationships are sustained over the long term.
Readmore about the Value pillar on p14
Readmore about the Engagement pillar on p24
Readmore about the Governance pillar on p32
4. PEOPLE
5. TECHNOLOGY
6. COLLABORATION
People in all areas of the business, as well as in procurement and supply chain management, will contribute to SRM. Businesses need to make sure that the necessary skills are developed and maintained to deliver successful SRM outcomes.
Successful SRM will be built on reliable, accurate, up-to-date information and working effectively, efficiently and in collaboration with internal stakeholders and suppliers. Getting information and managing collaboration using legacy IT is tough, but new software tools can help. They are cheaper and quicker to roll out than many businesses think.
Value fromSRM does not flow automatically when suppliers, governance, people and tools are in place. Businesses need to decide how to develop the relationship to get themost out of it. Relationships need to be explored and developed and specific initiatives identified that will drive value. Both supply-side and buy-side businesses may need to adopt changed behaviours and collaboratemore to get there.
Readmore about the People pillar on p42
Readmore about the Technology pillar on p52
Readmore about the Collaboration pillar on p62
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2016GLOBAL SRMRESEARCHREPORT
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