75
Figure 3.9. Contract management in place for key suppliers – buy side
Contract and performance management
1
24% 24%
24%
% OF KEY SUPPLIERS WITH ROBUST CONTRACT MANAGEMENT IN PLACE
20%
In the earlier section, ‘current state of SRM’, we analysed the feedback from companies regarding the primary focus of their SRM programme. Whilst 48% report that it is collabora- tion and creating new value, 25% and 27% respectively maintain their focus is more on contract and performance management. These activities are not mutually exclusive and should all be in place for effective SRM to flourish. Our survey has sought to establish what proportion of respondents’ ‘key supplier’ group has robust * contract and performance management in place. The feedback reveals a significant opportunity for improvement in both areas. Only 48% of respondents report that effective contract manage- ment is in place for more than half of their key suppliers . For perfor- mance management, only 38% report effective performance management in place for over half of their key suppliers . *State of Flux defines robust as: Robust contract management = all engagements are covered by valid contracts, approved by the appropri- ate authority; key contract terms and milestones are understood, monitored and acted upon; contract contains appropriate SLAs and KPIs, and these are managed via performance man- agement routines; contract change is managed effectively. Robust performance management = SLAs and KPIs are clearly defined and agreed; performance against KPIs is measured and reviewed on a regular basis; corrective and improvement actions are agreed and executed.
8%
26 50% 51 75% 76 100%
0 25%
DON'T KNOW
% OF BUY SIDE RESPONDENTS
Figure 3.10. Performance management in place for key suppliers – buy side
31%
2
% OF KEY SUPPLIERS WITH ROBUST CONTRACT MANAGEMENT IN PLACE
22% 23%
16%
9%
26 50% 51 75% 76 100%
0 25%
DON'T KNOW
% OF BUY SIDE RESPONDENTS
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