But the tools that accelerate SRM are all too often left in the workshop. While companies recognise suppliers as significant creators of business opportunities and risks, they manage relationships with themusing technology that emerged in the last century. Documents on shared drives, email and standard portal technology power SRM in more than half of the businesses we spoke to. Sixty-three percent of businesses report activity relating to SRM being carried out manually, in Excel, software first introduced 29 years ago. Since then, the world has changed, to say the least. Themajority of companies do have systems in place for managing supplier contracts (63%), but this is only one of several supplier management activities where the latest software tools canmake a big difference. Less than half of companies use software tools for the other key post- contract supplier management activities and nearly one in five use no tools at all for SRM. Where businesses use existing software for managing some aspects of information flow to and from suppliers, it is ineffective. Just over half of businesses say its performance is poor. Systems lack the required functionality and features, according to 59% of companies, while 63% say systems are disparate and not integrated. Leaders in SRM are now able to exploit software that is far superior to ageing desktop tools. Crowdsourcing, social media and big data can build better supplier relationships. Companies can exploit these tools in the cloud — a method of hosting computing power remotely, accessed over the internet, requiring little upfront investment. The cloud accelerates deployment frommonths to days and it promises to transform SRM. Cloud-based applications can be accessed from anywhere online, on many types of device. It makes them particularly effective for managing SRM activity, which relies on multiple players, across multiple geographies, within the business and outside of it. Historically, SRM programmes struggle to achieve effective oversight. After the initial launch, momentum can be lost. Compliance with original processes trickles away and they become inconsistent, fragmented and
sometimes forgotten altogether. SRM should take place in the business, as well as in procurement or supply management teams. But it often fails to achieve the prominence of other processes supporting sales, operations and productivity. SRM applications hosted in the cloud are easy, quick to deploy and are accessed via a user-friendly interface familiar from consumer-facing social media and ecommerce websites. They can also help prevent the gradual atrophy of the original SRM vision by providing a ‘control tower’ view of SRM activity enabling support or intervention when milestones are missed. Our last report demonstrated a direct correlation between companies achieving a leading performance in SRM and those where SRM gets strong backing from the senior management team: 64% of leading companies said SRM had support from top executives. In the 2015 State of Flux SRM report, we show how C-suite executives can bolster their chances of corporate success by recognising the vital role technology plays in improving supplier relationship management — and investing accordingly. Leadership, planning and execution will, of course, remain vital, but those companies exploiting modern, flexible cloud-based applications to support SRM will gain a crucial advantage. They can rapidly roll-out programmes to extract innovation and efficiency from suppliers, while at the same time reducing risk. As a result, they will be better placed to thrive in the disrupted global economy than those who do not.
63% of companies have systems in place for managing supplier contracts
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2016GLOBAL SRMRESEARCHREPORT
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