VALUE
95% of SRM leaders create a value proposition
COSTREDUCTIONANDCOSTAVOIDANCEARE THEMOSTWIDELYREPORTEDSRMBENEFIT
Fig 8. In which of these areas have you seen benefits from your SRM activities so far?
%
62
Cost reduction /avoidance
57
Of thoseable tocapture theirbenefitspicturejust 40%areable toreport bothfinancial andnon- financial benefits
Improved risk management
56
Operational improvements
49
More collaboration
46
Continuous improvement and innovation
43
Improved account management
33
Improved internal or end customer experience
32
Supplier discretionary support
26
Best practice insights
24
Access to market intelligence
23
Improved supply continuity Increased joint product /service development
20
18
Gaining competitive advantage in your market
15
Help achieving your sustainability and CSR goals
11
Improved speed to market
The list of specific, tangible value benefits reported over the past 12 months by businesses is broad. The proportion reporting cost reduction and cost avoidance has remained the same as 2015 and is the leading measured benefit. Risk reduction is in second place. Although the number of respondents reporting continuous improvement and innovation as a benefit has increased 6% since 2015, it remains disappointingly low at 46% (Fig 8) Naturally it's the leaders that are more likely to cite innovation among the measurable benefits of the activity.
HOWDOTANGIBLEBENEFITS TRANSLATETOFINANCIALVALUE? Measuring and reporting SRM benefits remains a challenge. To go a step further, by assigning a financial worth to reduced risk, supply continuity, retaining the best project manager or creative talent is almost impossible. Yet there are financial outcomes that SRM teams point to as a demonstration of their value. Some 20% of respondents who are leaders say that, as a result of their SRM activity, they have achieved post-contract financial benefits equating to more than 4% (Fig 9) .
Most businessesmanagingsupplier relationshipsbenefit frombetter risk management, cost reduction, cost avoidance andservice-level improvement
17 STATEOFFLUX
2016GLOBAL SRMRESEARCHREPORT
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