VALUE
CAPTURINGANDREPORTINGVALUE Business leaders supporting SRM want to see evidence that the money is being well spent once the project is underway. This might be financial returns in terms of savings. It might be increased revenues, as Australian telecoms giant Telstra has shown (see case study page 30). It might even be non-financial benefits, addressing the wider goals of the business, such as collaboration or sustainability. Yet capturing and reporting SRM benefits has been a perennial problem, according to our survey respondents. A quarter are currently unable to identify and report either financial or non-financial benefits. Of those able to capture their benefits picture, just 40% are able to report both financial and non-financial benefits (Fig 7) . It is one of the barriers that SRM needs to overcome if it is to earn increased confidence among C-level executives.
REDUCINGCOSTANDRISK REMAINPRIMARYDRIVERSFORSRM
Fig 4. Which business drivers will be the most important when it comes to implementing/developing SRM in the next 12 months?
%
69
Cost reduction /avoidance
67
Risk management /reduction
50
More supplier innovation
40 39
Improving supply chain efficiency Gaining competitive advantage in your market
THEVALUEPROPOSITION Related to business drivers is the value proposition – making a case for the value, financial or otherwise, that an SRM programme will bring to the business. Here, our survey shows businesses are less sure of what SRM offers. Only half have created an explicit value proposition (see Fig 5) . The value proposition should be the starting point for any SRM programme. It will set the strategy, influence the design and focus of activities. It is also the primary message for engaging stakeholders. Leaders in the field demonstrate its importance: While only just over half of all respondents have created an SRM value proposition for leaders it is 95% and 65% of followers.
It is not enough to have a value proposition for SRM. You also have to get it out there. It can bring SRM to life for business stakeholders and, in particular, C-suite executives, but only if they are aware of it. Communication is important in winning their backing, which in turn is critical to SRM success. Creating a concise SRM ‘sales pitch’ using the value proposition is essential to gaining more buy-in and support. Nearly three-quarters of respondents who created a value proposition used it to build a sales pitch (Fig 6) .
AQUARTEROFORGANISATIONSARE UNABLETOSPECIFICALLY IDENTIFY ANDREPORTTHEBENEFITSOFSRM
Fig 7. Are you able to identify and report the financial and non-financial benefits of your SRM programme?
ONLY JUSTOVERHALFHAVE CREATEDACLEARSRMVALUE PROPOSITION
THREEQUARTERSHAVEUSED THEVALUEPROPOSITIONTO WINSUPPORTFORSRM
Both financial and non-financial benefits
40 %
Fig 6. Have you used the value proposition to create an SRM sales pitch?
Fig 5. Have you developed and documented a clear value proposition for SRM?
Financial benefits only
13 %
Yes 74 %
Yes 52 %
Non-financial benefits only
23 %
No 40 %
Neither financial nor non-financial benefits
No 23 %
25 %
Don’t know 3 %
Don’t know 8 %
Note: due to rounding, percentages do not sum to 100.
16 STATEOFFLUX
2016GLOBAL SRMRESEARCHREPORT
State-of-flux_Master_Document_Final_Print.indd 16
12/10/2016 19:29
Powered by FlippingBook