INTRODUCTION
DIGITALSRM
SUPPLIERRELATIONSHIPS INTHENEWTECHNOLOGY LANDSCAPE
Companies are now able to exploit popular technologies in social media, big data and cloud computing to understand and improve their relationships with suppliers. It has never been more necessary for them to do so.
85% of respondents reported progress on SRM in 2016 22% of respondents reported significant progress on SRM in 2016
The right relationships sow the seeds of success; the wrong ones wreak havoc. It is true in life and it is true in business, now more than ever before. Every market is in the grip of change. In the 10 years to 2013, 712 firms fell out of the Fortune 1000 list of top global companies. This unprecedented level of churn has been driven partly by technology and the transformative effects that the internet, newmedia and computing technologies have had as they have swept through business over the past 15 years. It is also a result of significant geopolitical and demographic change. To survive, companies have sought innovation: in products and services; in their relationships with customers; and in their processes and business models. It shouldn’t be forgotten that innovation also comes from suppliers. We surveyed 275 global businesses representing more than 25 industry sectors and spending billions on third-party goods and services. Three out of four say they are actively seeking innovation from suppliers. While suppliers can spur success,
can bring a halt to production; and a supplier who bribes officials can bring litigation to its customers. Businesses need to manage these risks, but if that’s all they do, they can miss the competitive advantage that comes from harnessing suppliers’ knowledge and expertise. Whether they gain this edge or not will depend on the relationship. Every contract, every invoice, every meeting, every inspection and every tender can alter your relationship with suppliers: for good or ill. Employees from across the business, at different levels of seniority, will work with a single supplier. Bringing together all the information and all the people influencing a relationship is tough, but possible. It takes a focus and effort. Winning supplier relationships don’t just happen. They are carefully developed and managed. Supplier relationship management has been on the corporate agenda for a long time. In 2009, State of Flux started its SRM research by building a maturity model and in 2013 created an index of SRM performance. Since then, we have seen companies of all kinds making headway. This year, 85% of respondents reported progress on SRM, significant progress in the case of 22%.
many companies treat them primarily as a source of risk.
It is true that working practices in the supply chain can damage corporate reputations; an outage at a single vendor
02 STATEOFFLUX
2016GLOBAL SRMRESEARCHREPORT
State-of-flux_Master_Document_Final_Print.indd 2
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