COLLABORATION
We believe that while innovation is essentially a creative process it does need to be underpinned with an effective and efficient process to ensure that ideas are converted into tangible business outcomes. organisations benefiting fromsupplier innovation and having an effective process in place. There is a clear correlation between organisations benefiting from supplier innovation and having an effective process in place. Again, leaders are far more likely to have developed their SRM programme to the point where supplier innovation is becoming more of a focus. LEADERS BENEFIT FROM FORMAL INNOVATION PROCESS BUT STRUGGLE WITH ORGANISATIONAL COMPLEXITY If SRM uses supplier innovation as an important part of its value proposition to the business then barriers to innovation need to be overcome. If they are not then the case for SRM and its senior management and business support is weakened. There is a clear correlation between
ORGANISATIONAL COMPLEXITY AND LACK OF RESOURCES HAMPER SUPPLIER INNOVATION
suppliers. Evidence also points to this self- assessment being somewhat generous. However, leaders are puttingmore effort into developing collaboration with suppliers. They aremore than twice as likely to have created joint account plans with their key suppliers. SRMwith strategic suppliers is about creating a joint agenda and collaborative working to achieve joint goals. Developing and delivering joint account plans is fundamental to this way of working.
Organisations struggle to turn an aspiration for innovation into reality. The barriers are broadly similar across the leaders, followers and others. The biggest barrier is a lack of time and resource, followed quite closely by the absence of a process and by organisational complexity, which are probably linked. A reluctance to consider external ideas remains a barrier reported by 27%, a similar proportion to previous years. This must be surprising considering how much more competitive markets have become and how innovation is more and more a differentiating factor in success. BECOMING A CUSTOMER OF CHOICE REMAINS A STRUGGLE A customer of choice is one who positions itself through its processes, technology and behaviours to consistently benefit and gain competitive advantage from discretionary preferred treatment from its suppliers. If a company isn’t a customer of choice not only does it miss out on potential benefits but it will fall behind as competitors gain those advantages. When companies assess their status as a customer of choice, almost half of them say they are a customer of choice to less than half of their most important
Fig 42. What are themajor barriers to your organisation attracting, evaluating and implementing supplier innovation?
%
Leader
Follower
Other
Lack of time and resources
Internal reluctance to consider external ideas
12
22
16
23
11
24
We havemore important priorities
No formal process tomanage external innovation
15
12
23
3
23
10
Our innovation strategy does not include external innovation
None - we have no barriers to supplier innovation
50% of leaders have a process in place for supplier innovation
2
7
4
4
5
3
Complexity of our organisation
Other (please specify)
2
29
4
22
3
21
To break ground in new product categories, to burst through efficiency barriers, to launch services at accelerating speed – all these require collaboration with suppliers and other business partners. This collaboration needs to be ongoing, not just a one-off, by putting in place on-going arrangements, and supporting it with a high degree of trust and transparency. The broader and more innovative the opportunities, the greater the need to collaborate. Without collaboration, it is difficult to get to a strategic relationship. It is one of the key differentiators between a procurement department that will contribute
to business value and strategic goals, and a function that simply finds suppliers, tenders contracts, negotiates prices, and manages supplier performance and risk. For collaboration to fulfil its promise, however, there must be something in it for both sides. From our research, we’ve seenmost organisations failing to create mutual benefits. As a mass of services and products become digitally enabled or enhanced, business thinkers see the greatest opportunities for those who can formnew alliances at speed. Those willing to put a little in will see a lot in return.
SNAPSHOT ANALYSIS Although barriers are broadly
similar between leaders, followers and others, there are some notable differences. While leaders struggle with internal complexity and resources, as all organisations do, they do not see a lack of formal process as a barrier. Leaders aremost likely to see no barriers to supplier innovation, most probably because of their investment in process.
86
87
COLLABORATION STATE OF FLUX 2017 GLOBAL SRMRESEARCHREPORT
COLLABORATION STATE OF FLUX 2017 GLOBAL SRMRESEARCHREPORT
Powered by FlippingBook