TECHNOLOGY
Technology trails other pillars of SRM. For 86% of organisations, the main software for managing information about supplier relationships is Microsoft Excel. Contract management remains the most adopted technology: 65% of organisations opt to invest in this functionality. The number of companies using technology to help with the management of supplier performance has remained low: just 38% of companies choosing to adopt it. Similarly, only 29% of organisations use supplier risk management technology. Half of organisations say their current technology solutions do not adequately support the supplier management lifecycle while only 6% are fully satisfied with their technology support for SRM. Given the ease with which organisations can deploy cloud-based applications, either off-the-peg or customised, there is a huge opportunity to make SRM more effective with better information support. Summary
T he application of technology to support effective and efficient management of suppliers remains the least developed of the six pillars of SRM. What we find is a patchwork of solutions ranging from enterprise software to spreadsheets. Neither extreme is satisfactory in that enterprise applications are often a compromise that has a combination of good and less good functionality depending on the phase of the supplier management lifecycle the organisation is hoping to manage. Enterprise systems lack the ability to manage supplier performance because the business case and definition of requirements did not recognise the value and risk at stake in the post-contract phase. Meanwhile, spreadsheets are not efficient, secure or scalable. According to our research, 86% of organisations manage information on their key supplier relationships using Microsoft Excel. It is an excellent personal productivity tool but is designed for individual users. Collaborative features are limited, and a document can be saved and changed in multiple locations, making a single
version of auditable data difficult to achieve. Research from IT security firm Mimecast shows 88% of spreadsheets contain errors 1 . On average, poor quality data costs the organisations $15 million annually, according to Gartner 2 . Meanwhile, keeping business-critical data in Excel presents a security risk. Mimecast says two distinct ways in which a hacker can access Excel. Firstly, Power Query, an Excel feature allowing users to combine data from multiple different sources, can facilitate Office 365 system attacks. Secondly, malicious macros can also be programmed to run a series of instructions designed to target users and steal company information. Data management is essential in management of supplier relationships, but only 6% of organisations use an SRM system to produce reports, our research shows. Why the adoption of technology has stalled The last four years has seen only a minor change in the number of organisations adopting technology software to support more effective and
86% OF ORGANISATIONS USE MICROSOFT EXCEL AS THE MAIN SOFTWARE FOR MANAGING SRM 38% ADOPTTECHNOLOGYTO HELPMANAGESUPPLIER PERFORMANCE 6% ARE FULLY SATISFIED WITH THEIR TECHNOLOGY SUPPORT SRM
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STATE OF FLUX
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