2024 GLOBAL SRM RESEARCH REPORT
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have dedicated meetings (at a set frequency) to discuss queries related to contract management (compared to 37% of Followers). 84% of Leaders have contract document reviews (at a set frequency) to ensure agreements are in date and still valid (compared to 32% of Followers). Responses are closer between the maturity levels when looking at the presence of ad-hoc meetings to discuss queries related to contract management (68% of Leaders versus 52% of Followers). While these are sometimes unavoidable, we would expect these to be needed less frequently if dedicated meetings are in place. Risk management It is in this area that we see the largest gaps appearing between Leaders and Followers. 92% of Leaders have contingency/business
continuity plans in place versus 30% of Followers. Furthermore, 87% of Leaders run regular risk assessments (at a set frequency) to establish suppliers’ level of operational risk (versus 24% of Followers) and 89% of Leaders have dedicated review meetings (at a set frequency) to discuss risk (versus 39% of Followers). In recent years, we have seen risk management become an increasingly important driver behind supplier management development. However, this does not seem to have translated across the different maturity levels into strong and robust governance in this area. Performance management A similar pattern emerges when looking at key performance management activities – albeit with higher responses seen across the different maturity levels.
97% of Leaders have clearly defined contractual KPIs/SLAs (compared to 50% of Followers), while 92% of Leaders have dedicated review meetings (at a set frequency) to discuss performance. This latter element is only cited by 52% of Followers. Finally, 82% of Leaders have joint business plans in place to address performance issues versus 20% of Followers. Within performance management, we see extremely strong responses from Leaders – perhaps driven by their focus on looking for continuous improvement opportunities – and it is encouraging that the Followers are following suit in this area. Performance management is a key area where value can be achieved, and having governance established in this area can ensure organisations are best placed to realise it. A risks and/or issues log created in an offline platform (e.g. Microsoft Excel) 71% 61% 30% Ad hoc meetings to discuss relationship risks and/or issues 68% 48% 41% Ad hoc reviews of suppliers’ accreditations take place 29% 18% 11% Ad hoc risk assessments to establish the supplier’s level of operational risk 50% 26% 20% Contingency/Business continuity plans are in place with suppliers to effectively address any risks and/or issues that arise 92% 68% 30% Dedicated review meetings (at a set frequency) to discuss relationship risks and/or issues 89% 66% 39% Regular reviews (at a set frequency) of suppliers’ accreditations take place 63% 37% 16%
Level of contract, performance and risk management elements in place for critical and strategic suppliers Leader Fast Follower Follower
Ad hoc meetings to discuss queries related to contract management 68%
Ad hoc meetings to discuss performance against defined KPIs/SLAs 68% 49% 44%
52% 52%
Dedicated meetings (at a set frequency) to discuss queries related to contract management 89% 65% 37% Contract document reviews (at a set frequency) to ensure agreements are in date and still valid 84% 59% 32% Key contractual information captured via an offline programme (e.g Microsoft Excel) 61% 59% 29% No monitored activities 0% 2% 17%
Dedicated review meetings (at a set frequency) to discuss performance against defined KPIs/SLAs
92%
87%
52% Clearly defined contractual KPIs/SLAs
97%
77%
50% Joint business plans have been developed to help address areas of poor performance
82%
57%
20% Performance information captured via an offline programme (e.g. Microsoft Excel) 66% 63% 32% No monitored activities 0% 1% 16%
Leverage segmentation for better returns Are you spending too much time on low-value suppliers while missing out on strategic opportunities? Supplier Segmentation enables you to focus on suppliers that offer the highest potential for ROI. By aligning your resources with the most valuable partnerships, you can drive greater returns.
Regular risk assessments (at a set frequency) to establish suppliers’ level of operational risk
“This year’s results demonstrate that organisations are not effectively putting in place strong and robust governance to help establish supplier management. This is particularly true among Followers, who are lagging significantly behind Leaders across contract, risk and performance management.”
87%
56%
24% Sustainability metrics capturing 71% 42% 20% No structured activities 0% 1% 20%
Learn How: https://srm.stateofflux.co.uk/segmenting-suppliers
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