TECHNOLOGY
TECHNOLOGY
Level of satisfaction with current supplier management technology
Why, with so many great resources available, have organisations failed to embrace technology to enable one of their most vital business interactions: supplier management?
Leader
Fast Follower
Follower
In what is increasingly accepted as the digital age where data dominates, it seems remarkable that investment in information technology remains an area where SRM consistently comes up short. Fewer than one in 10 firms say they are totally satisfied with the way their IT systems and technology support the supplier management lifecycle. At the same time, 35% say their technology is currently inadequate to support it. While Leaders appear to have made more of an investment, only 17% report being totally happy with their solution with 80% describing it as only “adequate”. The aspects of the supplier management lifecycle that are more regularly enabled by technology remain those you would expect. These are supplier on-boarding and contract management, which are in place for around 60% of companies. There then follows a significant gap. The next best area is performance and risk management where around 35% have systems in place. Technology is used by less than one in five to help manage relationships, information and collaboration. In the meantime there remains a worrying reliance on desktop tools, such as spreadsheets and shared drives to capture, manage and share supplier information for more than 50% of companies. Summary
Adequate
79%
67%
44%
3% Fails to support
25%
51%
17% Fully supports 6% 4%
Snapshot analysis
It’s important to note and learn from the indication that during the height of the Covid-19 pandemic only 20% of organisations reported being able to access all the information they needed about their supply chain from a single system, significantly adding to the management challenges. This must begin to drive home the need for better technology-enabled information management for procurement and supply chain.
O n 6 August 1991, the World know what the Internet was. What followed several years later was the very high profile dot.com bubble and the revolution in e-commerce. However, behind the scenes, business was being revolutionised by technology and the use of data to support and expedite decision making, predict demand and forecast risk. Wide Web went live. There was no fanfare in the global press. In fact, most people didn’t even Artificial intelligence, the Internet of Things and augmented reality are now within the grasp of every business at low capital cost: with cloud computing having shifted the risk-reward equation when it comes to investing in new technology. So why, with resources such as these available, have organisations failed to embrace technology to enable one of their most vital business interactions, namely supplier management?
35% OFCOMPANIESSAYTHEIR TECHNOLOGY ISCURRENTLY INADEQUATETOSUPPORT THEIRSUPPLIER MANAGEMENTNEEDS 1 IN 4 ORGANISATIONSNAMEDA LACKOF ITFUNCTIONALITY ASONEOFTHEIRTOPTHREE BARRIERSTOASUCCESSFUL SRMPROGRAMME 35% OFCOMPANIESREPORT HAVINGSYSTEMSFOR PERFORMANCEANDRISK MANAGEMENT
Since we started our research in 2009 the gap between executive and practitioner expectations and the reality of technology support for supplier management has been clear. The proportion of companies fully satisfied with the technology available to them has remained low. There can be no doubt that the lack of an adequate technology solution to support supplier management is seen as a barrier. This year, more than one in four organisations named a lack of IT functionality as one of their top three barriers to a successful SRM programme. Currently fewer than one in 10 firms say they are totally satisfied with the way their IT systems and technology support the supplier management lifecycle. At the same time, 35% say their technology is currently inadequate to support their needs. Leaders have always looked to invest in technology more than the rest but they too have reservations. Only 17% report being totally happy with their solution, while 80% describe it as “adequate”.
Organisations need to re-evaluate the
description of “adequate” as being sufficient when it comes to their supplier management technology.
66 STATE OF FLUX
2020 GLOBAL SRM RESEARCH REPORT
67
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