VALUE
MUTUALITY A basic tenet of a successful relationship is mutuality. Every contract should offer some benefits to both parties. Yet it is often overlooked in commercial contracts where both sides try to extract as much as possible and give away as little as possible. If SRM is to be successful it should nurture relationships that create value for both parties. The willingness of companies to share the benefits derived from genuinely collaborative efforts is evidence of a move towards mutuality. Although around half of our survey respondents say they share financial benefits with suppliers, four out of five of these only do it occasionally. 35% of leaders are sharing the financial benefits of joint SRM activities with suppliers on a regular basis. This is twice as many as followers and more than four times that of others.
LEADERSREAPTHE FINANCIALBENEFITS
Fig 9. What is the average post-contract financial benefit you have achieved as a result of SRM activity?
% of respondents
5
Other Follower Leader
More than 6 %
11
7
15
4.1 % to 6 %
10
9
30
2.1 % to 4 %
18
14
15
0.1 % to 2 %
4
16
FINANCIALBENEFITSARENOT SHAREDFREQUENTLYENOUGH
35
55
Don’t know
50
Fig 10. Do you share financial benefit derived from joint SRM activities with your suppliers?
SNAPSHOTANALYSIS: Leaders in SRM aremuchmore likely than other businesses to track the benefits of SRM after contracts have been signed. Only 35%do not, compared with 51%of the whole field. This is likely to be related to the fact that nearly all leaders create an explicit value proposition for SRM. Leaders aremore aware of what they want fromSRM and more effective in tracking what they get.
%
Leader
35
Follower
17
Other
7
EVENLEADERSSTRUGGLE TOACCURATELYCAPTURE FINANCIALBENEFITS
20% Over 20%of respondents can measure post-contract financial benefits of more than 4%. 65% 65%of leaders canmeasure post contract benefits of SRM
For leaders, the proportion reporting financial benefits in excess of 4% stands at 20% and for followers, 21%. However, the challenge in measuring and reporting these benefits is revealed in the number of organisations that don’t know what, if anything, they have gained. Even among leaders this figure is high at 35%.
However, sharing financial benefits is not the only way to recognise supplier contribution. Almost half of this year’s respondents indicate that they recognise suppliers in other ways (see box to right).
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