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STAKEHOLDER ENGAGEMENT AND SUPPORT While respondents have consistently reported good progress in achieving stakeholder engagement and support, the evidence suggests there is still a lot of work to do. None of the three key stakeholder groups identified – executive and senior management, business and operational stakeholders, or suppliers – are fully engaged by more than 50% of respondents. Leaders have a much higher level of engagement but still not at the level it needs to be. Stakeholder engagement is almost impossible without having a clear understanding of what the SRM value proposition is. Overall, 43% of respondents have created a value proposition. However, only 14% have communicated this to all impacted stakeholders. There is a better understanding of how strategic relationships would benefit both the buy and the sell side. At the moment, 25% of the SRM programmes the sell side are engaged in, are not with customers they regard as strategic. GOVERNANCE AND PROCESS Governance and process has seen the most improvement since 2012 for both leaders and followers. Single point accountability for the development and implementation of SRM is increas- ingly evident through the appointment of process owners. Segmentation of the supplier base is now common practice for most organisations. More than eight out of ten respondents say they formally segment their suppliers. The variation in approach is now more to do with the criteria that are used and the number of segmentation tiers that are thought to be appropriate. An increasing proportion of external spend is coming within the scope of SRM, with almost 60% of respondents reporting that more than half of their third party spend is covered by SRM. Developing the appropriate SRM operating model is making progress. Last year this was one of the areas making the least progress. This year, over 50% of respondents report that progress is being made. However, it still remains a problematic area for many. The survey has sought to establish what proportion of respondents’ ‘key supplier’ group has robust contract and performance management in place. The feedback tells us only 48% of respondents have effective contract management in place for more than half of their key suppliers. For performance management the figure is only 38%. PEOPLE AND SKILLS Investment in training, and the development of an end to end talent and organisational effectiveness approach, is still a major challenge. While SRM is increasingly recognised as a distinct role by more companies, it is not always being supported by the creation of formal job profiles, skills requirements, training solutions and performance management. Organisations are increasingly making supplier relationship managers the focal point of the relationship but are also recognising the need for effective teamwork. Nearly seven out of ten buy side organisations are making use of cross functional teams to help manage key supplier relationships. The skills required to deliver effective SRM and real business value are nowmore fully under- stood. However, what this reveals is a significant gap between demand (for training in important skills) and supply (the provision of that training). The biggest gaps are for the relationship management skills such as influencing, communication and strategic thinking.
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