95% of SRM leaders create a value proposition 65% of leaders canmeasure post-contract benefits of SRM 47% of respondents never share benefits with suppliers
VALUE
SUMMARY
Whilemost businesses are seeing benefits fromSRM in operations, costs and risk, there is a worrying lack of focus about what it can do for broader strategic objectives. Nearly half of businesses don’t have, or don’t know if they have, a value proposition for the activity. This is where SRM leaders and followers differ from the rest: nearly all of the leaders andmore than two thirds of followers have created a value proposition for the activity. The approach works. More than 20% of leaders and followers canmeasure post-contract financial benefits of more than 4%. Well over half of themare also able to capture the non-financial benefits.
No matter how broad the benefits of SRM, every business has its own goals and priorities. To secure support from the leadership team and the wider business, every programme should tally with strategic objectives. It needs a promise of value in the areas that matter most to the business. State of Flux’s 2016 survey illustrates the range of drivers motivating businesses to establish, develop and improve SRM. Not unexpectedly, we see a strong cluster around two particular goals (see Fig 4). Cost reduction and cost avoidance remain the highest ranking, with 69% of respondents classing them as important or very important. These are closely followed by risk management and reduction with 67%. Both of these figures have fallen slightly since last year’s survey. This year, innovation shows a slight increase, up from 47% to 50%, establishing itself as the third most important business driver for SRM.
Capturingandreporting SRMbenefitshasbeen aperennial problem, according tooursurvey respondents. Aquarter arecurrentlyunable to identifyandreport eitherfinancial ornon- financial benefits.
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