ENGAGEMENT
ENGAGEMENT
is the leadership team placing ‘other business priorities’ ahead of SRM. The second most reported barrier is that the leadership team has ‘insufficient awareness of the SRM value proposition’, and third is believed to be the continued failure of procurement to get further up the corporate agenda.
Senior management and executive support and engagement with SRM (all respondents) Strong and active engagement and support
SRM has to compete with other business priorities to get the attention and support of the leadership team.
Our analysis in 2019 suggested that SRM engagement – in particular at a senior level – was in danger of stalling after several years where the level of support was already suffering a decline. This year brings good news, however, as we see a welcome improvement with senior management support for SRM initiatives bouncing back to 69%. However, there still remain barriers to overcome and similar to previous years the most significant of these remain, other business priorities’ ahead of SRM, insufficient awareness of the SRM value proposition, and the continued failure of procurement to get further up the corporate agenda. Support from business and operational groups is a similar level to recent years at 57%. Meanwhile suppliers continue to be supportive with an estimated 75% actively engaged, although this isn’t as high as in some previous years. As expected, the level of supplier support evident amongst Leaders continues to outpace other groups significantly at 97%. Engaging with a wider group of suppliers to better understand how companies are perceived as customers has been carried out in the last 12 months by only 39% of companies. Summary
20%
Business and operational engagement
Supportive
49%
The successful implementation of SRM requires engagement and support from all those that interact with suppliers. While strong and active support from the leadership team is the prerequisite to initiate and maintain focus on SRM, it’s the business and operational groups that will largely deliver the changed relationship. This group is arguably more difficult to engage as for them the change can be seen as disruptive and potentially more work. While support from the leadership team has this year reversed a worrying decline, the level of support from business and operational groups has become stuck at between 55% and 60% for the past few years. Once again following the pattern set when reviewing support from the leadership team, for business and operational groups the Leaders outperform the rest. When ‘strong and active’ and ‘overall support’ are combined the positive backing achieved by Leaders exceeds 87%.
Neutral
With 52% of Leaders reporting strong and active support, they are twice as likely compared to Fast Followers to have that level of buy-in from their leadership team and seven times more likely than Followers. It’s fair to say that there is very little active opposition to SRM amongst leadership teams. Instead, the scepticism still felt by some conceals itself in the ‘neutral’ feedback reported by 23% of Followers and even 3% of Fast Followers. Across all survey respondents, engagement with the leadership team remains a challenge and up until this year had been showing a declining trend. From 2010 to 2019 it fell from 80% to 58% but encouragingly this year that trend has reversed and overall support from the top is back at 69%
Some opposition 25%
4%
N o matter how strong your and active support of an organisations’ leadership, the operational teams most affected and other stakeholders. This will be an experience all too familiar to procurement as it has, in many companies, already fought a long and hard battle to establish itself as a strategic function. business case, very little can be achieved in any business transformation without the full Nobody should expect change to be easy, however, and the natural desire to see a strong business case and evidence is healthy. Therefore organisations must take stakeholder engagement seriously, and as our ‘SRM Journey’ model shown on page 14 indicates, ensure that it is part of the plan and maintained throughout.
Barriers to gaining more leadership team support for SRM (all respondents)
support for their SRM programme from the organisations’ leadership team, an increase of 9% compared with 2019. We also note an increase in the level of ‘strong and active’ support, and it’s this level of backing that makes the real difference. This is confirmed when we look at the results from SRM Leaders – those organisations with the most mature programmes – who are achieving the highest returns. Strong and active’ support from the leadership team increases to 52% amongst SRM Leaders, making them seven times more likely than Followers to have the full backing of senior executives.
Other business priorities
31%
69% OFRESPONDENTSREPORT SENIORSTAKEHOLDER SUPPORT 97% SUPPLIERSUPPORT IS REPORTEDBYLEADERS 75% OFLEADERSHAVEGATHERED
Some industry sector variation on leadership team support
Insufficient awareness of the value proposition / business case
The two industry sectors reporting the highest level of leadership team support are Financial Services and Consumer Goods both at around 75%. This compares favourably to the Capital Intensive sector where support is just 60%.
25%
Procurement and supply chain is not high enough on the corporate agenda
Snapshot analysis
16%
They see it as slow to implement and deliver benefits
Another barrier to gaining more leadership team support for SRM is a belief that it’s slow to implement and realise benefits. This becomes a self-fulfilling prophesy when the leadership team fails to prioritise it and is slow to adopt and provide adequate time and resources to roll the programme out at pace.
Barriers to leadership team support
10%
Support for SRM from the organisations’ leadership team is so vital that we dedicate an extra question to explore the most often reported barriers encountered. While the declining trend in support has been reversed we should not lose sight that any lack of backing is likely to be caused by the familiar barriers to SRM. The most significant amongst these
No barriers – our senior management and executive support is strong
9%
Senior stakeholder engagement
Other
5%
The global results shown on page 13 indicate stronger performance in the Engagement pillar than in 2019 and this is borne out by 69% reporting
STRUCTUREDSUPPLIER FEEDBACK INTHEPAST 12MONTHS
Disagree with the concept
1%
32 STATE OF FLUX
2020 GLOBAL SRM RESEARCH REPORT
33
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