Getting consistency across the group is something we are working on,” he reported in our study. At the same time, 30% of respondents saw a decline in progress in finding SRM skills, a problem some businesses are trying to address. The general manager of commercial strategy at an Australian telecoms firm told us: “SRM was failing to focus on value. We’re in the process of recruiting a dedicated SRM team to support new value-driven organisational challenge.” Our research shows investment in training continues to be low, but of equal concern is the lack of a structured approach to people development from the definition of the role, through the failure to appreciate the necessary skills and identify the gaps and then to the alignment of appropriate training. There are other areas where SRM progress is lacking too. We see SRM on more procurement strategic road maps but not as an integral part of enough business strategies. Too few businesses are able to articulate benefits via a clear and business specific value proposition. SRM programmes also often suffer from an internal focus when they should also be considering suppliers’ perspectives. Perhaps themost worrying area struggling to improve is innovation, where 51% of businesses report either no progress or some decline. Business leaders will doubtless be concerned because innovation is a strategic imperative. In a recent poll it was found that more than 50% of CEOs ranked R&D and innovation as a key priority. Yet businesses are failing to exploit the opportunities presented by improving supplier relationships to foster greater collaboration and innovation.
CALLTO ACTION
In our 2015 SRM report, we emphasised the increasing
importance supplier relationships and showed why senior executives should do more to support better management of them. We found that:
→ The role of suppliers will only become more important → Companies will become more reliant on third parties → This represents both increased risk and opportunity
While these three predictions still hold true, progress on SRM does not reflect their strategic importance. Steady, incremental development of SRM is not sufficient tomeet the challenges businesses currently face, or the ones that lie ahead. Many markets are ripe for disruption and the companies that survive and thrive will be the ones who can collaborate with suppliers to create greater value for customers, not in a few years’ time, but now.
Toomany SRM programmes are fragmented and piecemeal. Therefore our message and call to action for 2017 is clear. SRMneeds to be tackled on a broad front. We believe this will require companies to develop a strategy that addresses the six pillars of SRM as an integrated change programme. We recognise that SRM is a journey and that companies are at various points on that journey. In some cases, such as those we have reported as leaders, the focus will be on building stronger capability and accelerating or expanding programmes. For others, it might involve taking one or two steps back and closing capability gaps. And, in some cases, the journey is just beginning and needs to be planned.
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