CALL TO ACTION
relationships are about people. The best organisations see that they must: define operating models, describe roles and jobs, identify requisite skills, assess current skill levels, align training, and include SRM in personal objectives and development plans. Only organisations that invest in people will get optimum returns from SRM. Wave goodbye to desktop tools Many people love Microsoft Excel, but it is not the tool for SRM. Cloud- based software will now enable you to drive performance efficiently and with minimum risk. It is time to push back against traditional IT strategies. Who says you have to make serious platform? Insist on best in class. Use the SRM value proposition to build your technology business case. Deliver value faster, reduce risk, and improve oversight and control. What’s not to like? Grow value together It’s easy to like the idea of collaboration on paper. But people only believe it is real when they see working examples. So, it’s best to start small and build an accelerated collaboration and value pilot with selected suppliers to create momentum. Success will see the functionality compromises when selecting a single procurement business willing to work with suppliers on joint business plans. Then, get ready to talk about it. Create a narrative around the advantages of collaboration versus adversarial relationships.
Call to action The time for thinking about supplier relationships, and what organisations can gain from them, has to come to an end. At some point, plans become action. Here, State of Flux offers a few ideas about where to start.
Prepare your elevator sales pitch SRM value can be many things. It can address cost, efficiency, quality, growth, risk, compliance, sustainability and innovation. But to get the attention of those holding project purse strings, procurement leadership needs to create a concise, direct elevator sales pitch for SRM, one which presses all the right buttons in terms of business strategy and immediate priorities. Draw from evidence and celebrate success. SRM works, but you need to convince people before they will invest in it. Find the right language Talking about SRM in terms of enhanced contract or performance management is unlikely to set anyone’s pulse racing. Focus on outcomes that are relevant to business goals. If the value proposition is in good shape, you should be able to engage people internally, but don’t ignore suppliers. Taking their support for granted is a big mistake. Talk to them early, get their feedback through voice of the supplier surveys and build your programme to work both internally and externally. Lastly, stop thinking about SRM as a procurement thing: it requires a network of advocates across the business bound together using the value proposition. Segment suppliers with purpose Understanding the differences between suppliers is not enough; you also need to do something with
that knowledge. Don’t get fooled into thinking that segmentation is ‘job done’: the whole point is creating differentiated treatment strategies, but too few organisations do that. Good governance is about people – getting them to the right meetings and using their input. That’s where engagement will help. Lastly, SRM is about more than contract, performance and risk management, but failures in these areas will bring relationships crashing down. Use SRM to get the necessary controls and oversight in place. Make people a priority It has become a blind spot in SRM strategy: investment in people has been lacking for years and there has been little improvement this year. Beyond the data, technology and strategy,
Final words on supplier innovation
Stop dodging the subject: define what innovation is for you, what you want and expect to gain. Kick down a few walls if you have to. For SRM programmes that are struggling to gain traction, innovation can provide the spark that attracts the recognition they deserve. It is one thing which, in the eyes of some stakeholders, will make the whole supplier management thing worthwhile. You might already have in place some of the key enablers for supplier innovation such as incubators, supplier ideas forums and even dragon’s den- type activities – get them organised and create a consistent process. Link them to your treatment strategies and engage the right suppliers.
2019 GLOBAL SRM RESEARCH REPORT
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