PEOPLE
PEOPLE
with supplier account managers who traditionally have been more focused on a small number or even a single strategic client. Whatever model is adopted it’s important to define the role in terms of its responsibilities and key objectives. Generally there are two types of SRM role. the other roles that involve supplier interaction and will be part of the SRM team. These can vary from the operational managers and service users that might be managing day- to-day interactions and providing performance feedback, to the Firstly the principle relationship management role, and secondly relationship ‘Accountable Executive’ who will engage the supplier at a strategic level and be a final point of escalation. In the case of the primary SRM ‘relationship management’ role just over 50% of companies have defined this position. In the case of Leaders the proportion increases to over 85%. This would indicate that the more mature SRM programmes have put in the work to ensure the role has clarity. For the supporting positions the indicator is understandably a little vaguer in that there are a number of different roles to be considered. However, here 45% of companies report having defined these supporting jobs, with the figure rising to 76% for Leaders. An extension of defining these positions is to turn them into job descriptions, thereby creating a recognised category of role that will make it more desirable and a better defined step on the career development path. In this year’s research For many procurement organisations SRM remains a relatively new discipline and the skill set required to deliver the role is not often fully developed.
we find that only 35% of companies have done this work, although the proportion is noticeably higher amongst Leaders where it is 67%.
Investment in people and skills development remains under-represented at the SRM table. There are few signs of improvement compared with last year when things appeared to be moving in the right direction. Last year more businesses than ever were defining the SRM role (58%) but this has fallen back slightly to 55%. Having defined the SRM role the expectation is that organisations will look at the role and decide what skills and competencies are required, but this year only 30% of companies have taken that step and even fewer – just 17% – have gone on to carry out a capability assessment. Despite this apparent lack of preparation organisations are then jumping straight to training with approaching 50% having provided some form of SRM training. Gaining internal stakeholder support and the trust of suppliers in SRM will depend on the people organisations dedicate to it. This feedback indicates considerable room for improvement in defining their roles and developing their skills. Summary T he Six Pillars of SRM are all aspects of good practice that when combined maximise the opportunity for organisations
People and skills development
For many procurement organisations SRM remains a relatively new discipline and the skill set required to deliver the role is not often fully developed. In order to develop the skills an organisation needs to deliver effective SRM and its associated benefits it is important to first understand clearly what those skills are, and then secondly to assess the extent to which they currently exist. In each of our previous reports we have found that not enough companies are investing sufficient time and effort in this important area. This year is no exception with less than 30% of respondents reporting that they’ve created an SRM skills and competency framework of any description. While showing a slight increase compared with 2019 (25%) it still falls well below expectations. When it comes to gaining an understanding of whether those skills are available to the organisation in existing teams the figure is again low at just 17%, showing no increase compared with last year. In 2019 we revealed the skills that organisations believed to be the most important for SRM. The list was headed by strategic thinking and communication followed closely by influencing skills, change management and cross-functional working. At that time risk management didn’t feature highly but in 2020 it has been reassessed as a critical skill necessary to exercise proper oversight of the supply chain at an operational and strategic level. However, according to our research less than 60% of companies believe they have the necessary skills to manage risk effectively across their critical suppliers. While this figure increases significantly for Leaders and Fast Followers, at 91% and 70% respectively, it must be real cause for concern and linked to the disappointing feedback on effective risk management on page 48.
Our research and engagements with companies reveal a somewhat haphazard approach to people development. We will often see evidence of an investment in training without there being a defined role description or an analysis of the skills and competencies required. Where this has taken place we don’t often find that individuals or teams have had their skills assessed and therefore training isn’t targeted. This analysis will address the feedback we’ve received about each of the steps in the people development process.
to benefit from SRM. However, if there is one pillar that all the others depend on it’s People. Being able to articulate the value proposition and then engage stakeholders to gain buy- in requires a strategic and challenging mind-set combined with excellent communication skills. Deploying treatment strategies, setting up governance and oversight of a contract, performance and risk management requires organised thinking and great teamwork. understanding of data and, of course, making collaboration happen is all about working with people. It can be easy to say that we have a strategic relationship with a company, but it is only the people involved and committed Making the best use of technology requires discipline and an to that relationship that will make it any more than a label and turn it into a vehicle to create incremental value. For this reason organisations need to invest in people and skills development. Unfortunately it’s an area where that investment hasn’t taken place.
85% OFLEADERSHAVEDEFINED THEPRIMARYSRM ‘RELATIONSHIP MANAGEMENT’ ROLE IN THEIRORGANISATION 86% OFLEADERSHAVE INVESTED INSRMTRAINING 1 IN 4 COMPANIESRESPONDINGTO THISYEAR’SSURVEYHAVE TAKENNOSTEPSTODEVELOP THEREQUISITESRMSKILLS FORTHEIRORGANISATION
Snapshot analysis
It could be said that our research sample included organisations with a much less mature approach to SRM and that they may not yet have reached the stage of developing skills and competency frameworks and assessing capabilities. To an extent this is borne out by the fact that Leaders are twice as likely to have developed a skills and competency framework and completed a capability assessment compared with the rest, at 60% and 41% respectively.
Role definitions
We know that SRM is delivered via a number of different organisational models. Our previous research has revealed that the most widely adopted model is where the category manager role is expanded to encompass SRM (often for more than one supplier) while retaining category management sourcing responsibilities. In an increasing number of cases – in particular Leaders – a more dedicated role is created that acknowledges the need to work on a level playing field
56 STATE OF FLUX
2020 GLOBAL SRM RESEARCH REPORT
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