INNOVATION FEATURE
Lack of time and resources block supplier innovation Barriers to more supplier innovation (all companies)
approach adopted by many companies. While neither is without merit, these approaches alone will not stimulate the collaborative approach to innovation required to maximise its impact. More effective approaches to creating incentives for supplier innovation include provision to protect supplier intellectual property rights. Evident in 53% of companies. Other measures that are more likely to be effective are adopted by fewer companies, for example having a mechanism in place to share benefits (28%) and setting up an innovation incubator or similar (26%). Innovation process Bright sparks of inspiration are often seen as the source of innovation. It seems like a natural phenomenon that does not sit well with a disciplined and structured process. But that’s a misunderstanding of what it takes to benefit from innovation. The idea is only part of it. Developing ideas into something that creates value for customers and stakeholders: that requires a process. Just 15% of companies believe they have an effective process in place to simulate and manage supplier innovation. Looking at the propensity for SRM leaders to have an innovation management process, we see a markedly different picture. Leaders are twice as likely to have an innovation process compared to fast followers and five times more likely than followers. Again, the leaders are also the organisations getting the most value from SRM. successful SRM, we found resources and skills were chief among them. Just 33% of respondents said they had sufficient resources and skills, nearly half said they did not, and 18% were unsure. We find similar problems in technology support. Less than 6% of companies have an IT system that helps them manage supplier innovation. Even where this is the case, it is often only a supplier portal that acts as little more than an electronic suggestion box. Resources and skills When we looked at barriers to
We don’t have an innovation strategy
We don’t have sufficient time and resources to engage properly 18% We don’t have a defined process to manage supplier innovation
7%
There’s a common perception that suppliers are just trying to sell
6%
15%
We don’t get sufficient ideas from suppliers
Complexity of our organisation
15%
5%
Conflicting business priorities
There’s a general reluctance to consider external ideas
15%
4%
There’s no clear internal ownership for supplier innovation
Our innovation strategy doesn’t include external innovation
10%
4%
We don’t have any metrics on supplier innovation 66% Outputs are measured - meaning the financial/non financial impact of supplier innovation 26% In process/pipeline stages are measured - meaning key stages/ gates from receiving an idea to accepting/rejecting 15% Inputs are measured - meaning supplier innovation ideas received 17% Two in three organisations do not measure supplier innovation Supplier innovation metrics (all companies)
Senior executives support supplier innovation Senior executive support for supplier innovation
Supportive
48%
Neutral
35% Strong and active engagement and support 11% Some opposition 4% Strongly opposed/resisting 1%
56
STATE OF FLUX
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