36
Alignment of business drivers and value In the two previous sections ‘business drivers’ and ‘value’, we can see that the value being reported as delivered by SRM is reasonably well aligned to what companies are telling us are the main business drivers. Top 5 most important business drivers Top 5 value / benefits delivered Risk reduction Cost reduction / avoidance Cost reduction / avoidance Risk reduction Service improvement Service improvement Contract compliance Supply chain efficiency End customer experience Improved quality However, in other sections of the report it will be revealed that in many cases this is serendipitous, as the work to align the value to key business drivers is not undertaken. Less than half of the respondents have created a specific value proposition for SRM, and even fewer have effectively socialised this with key stakeholders to ensure good align- ment to what the company is aiming to achieve.
We cannot stress enough how important it is to achieve the proper alignment of SRM value to the needs of the business. Clearly it’s a vital part of achieving and maintaining stakeholder engagement, but more importantly it ensures SRM has the maximum impact on business performance.
Value for suppliers This year we extended the number of questions to the sell side to provide more feedback and analysis on the value that suppliers get from participating in SRM programmes. Firstly, we compare buy side and sell side feedback on how frequently the benefits of joint SRM initiatives are shared. While the feedback shows a broad consensus on the frequency of sharing benefits, it’s also clear that overall the frequency is low with only 15% of companies making it a regular practice.
Figure 1.7. How frequently financial benefits derived from joint SRM activities are shared – buy side and sell side
■ BUY SIDE ■ SELL SIDE
43%
34%
33%
23%
21%
18%
12%
7%
4% 5%
ALWAYS
OFTEN
OCCASIONALLY
NEVER
DON'T KNOW
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