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Conclusion So in asking ourselves the question, ‘is Australasia ready for SRM?’, we believe the answer is yes and that either procurement functions are in the preliminary stages of defining their paths forward, or at least buy into the fact there is value attributed to it. The key to answering the question is understanding how you are performing across all areas of the SRM framework, and whether there is the maturity in both the busi- ness and procurement function to adopt the principles. When reflecting on your own organisation – here are six things to consider: 1. COLLABORATIVE WORKING One of the biggest challenges facing organisations is shifting relationships from being buyer dominated and constantly dictating the terms of working together, to adopting a more balanced approach by increasing the voice and influence of the supplier through trust. With years of either mistrust or the ability to command and control, moving both procure- ment and the business away from this can be a challenge. Not only will you need to encourage your suppliers to be more open and reward, not reprimand, positive challenges on the status quo, you will need to identify and manage behaviour in the business that does not adhere to these principles – this is not always easy when it’s ‘our’ budget. 2. FOUNDATIONS Understand the maturity of your function, consider your strengths and weaknesses, then consider where SRM sits as part of the broader improvement you are looking to deliver. If you are an organisation that is still grappling with getting its infrastructure right, then talking to frustrated stakeholders about helping them access innovation, or telling them they should be adopting certain ways of working as you have segmented their supplier, may return limited success. 3. THE ELEVATOR PITCH If you can’t articulate what contract management, supplier performance management and SRM is, including the respective benefits, how can you expect the business to understand? In defining it effectively, you will quickly be able to build your team’s under- standing, who can then in turn start to educate the business.
4. AREAS OF GOOD PRACTICE As all businesses have high value and high spend areas that will no doubt have suffered costly chal- lenges in the past, inevitably there will be some good practice or processes that will have been adopted to deal with these challenges. In both, identify the cost of the issues and linking the good practice that helped deal with them, to the principles of SRM. You can then start to build the case for SRM in the terms your busi- ness understands. 5. SCALABLE FRAMEWORK One size definitely does not fit all. Consider whether you know who your key suppliers are that will help you improve the performance of your business and whether you have selected them through a struc- tured segmentation process. Just because they are critical to your business, does not mean they are committed to help over and above delivering on the contract you have agreed. Once identified, be clear how you expect to work with them. This needs to be clear to the business and the suppliers. 6. SUSTAINABLE Often the answer here lies in technology. Think through how you are monitoring and capturing all the work that is being done and whether knowledge will leak out of the business as you experience attrition. Values should be clear, processes easy to follow and knowledge captured – so SRM transcends individuals. In summary, from the conversations we have had and the data with have gathered, we believe Australasia has an understanding of the value of SRM and an appetite to capture it. For the pioneers, we believe there is a fantastic opportunity for businesses to steal a competitive advantage and be a leader of SRM in the Australasian region. Article by Adrian Bower, CEO at State of Flux Australia. Call him on +61 (0)449 840 942 or email him at adrian.bower@stateof-flux.com for more information on SRM in Australasia.
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