2024 GLOBAL SRM RESEARCH REPORT
TECHNOLOGY SUMMARY OF INSIGHTS
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Selection priorities When selecting a supplier management technology solution, three priorities emerged for all respondents: • Ease of integration with existing internal systems, • The ability to collate key supplier information in a centralised location • The requirement to support end-to-end process with automated workflows. This suggests that focus is clearly on consistency and standardisation, consolidating information in one location and ensuring seamless integration with other systems to enhance information flow. Interestingly, the availability of post- implementation platform support was not commonly cited (8% of all respondents and 5% of Leaders). Whilst during implementation, efforts should be made to upskill the team and gain an in-depth understanding of the platform, the lack of ongoing business-as-usual support may stop organisations harnessing the full benefits of any system, resulting in usage declining over time. Furthermore, only 6% of respondents prioritised the ease of extracting and normalising data via AI. Given that AI is frequently highlighted in both technology requirements and sales pitches, it is notable that its practical value is not as highly regarded. During the RFI/RFP process, when organisations are determining their key requirements, the focus should be on what is genuinely needed and useful, rather than on any ‘flavour of the month’ features. Additional capabilities When respondents were asked to rate their systems against additional capabilities, it was insightful that many were unable to identify the additional capabilities their systems had, such as automation, generative AI, collaboration / chat features and external data feeds.
Technology landscape A key element that we have
Sourcing and contract lifecycle management are activities where dedicated technology solutions are most used, with Leaders reporting usage at 79% and 82% respectively. However, essential supplier management activities such as performance, risk management and relationship management are less likely to be supported by a dedicated solution by almost 20% and 33% respectively. Risk management remains a high priority for organisations’ supplier management programmes, yet the adoption of supporting systems is lagging, with desktop tool usage continuing at a comparable level. Many organisations recognise the importance of technology to enable performance management but have not implemented a dedicated system that supports this. The lower uptake of supporting systems may be attributed to satisfaction rates: just over a third of all respondents are content or happy with their current system. For dedicated solutions that are commonly used for sourcing and contract lifecycle management, satisfaction levels were reported at 50% and 38% respectively, highlighting a deficiency in the support these solutions offer for contract management. Furthermore, lower satisfaction levels are observed in supplier management activities that facilitate relationship development, with desktop tools predominantly employed for this purpose. There is also a noticeable disconnect in the perceived benefits of supplier management technology. While 77% of respondents recognise performance management as the primary advantage of effective supplier management technology, only 19% have a dedicated solution in place for this. Additionally, there is ambiguity surrounding the use of advanced features such as AI and automation. Despite these features being desirable, an average of 56% of respondents were unable to assess the capability of their systems in these areas.
approaches). However, it does clearly indicate that all approaches used by organisations have significant room for improvement in terms of satisfying users and supporting supplier management activities effectively. Very few respondents actually rated their satisfaction as excellent (across all respondents, the highest was 9% in sourcing management – the same response was highest among Leaders, at just 24%). How happy are you with your current support systems? Excellent Good Neutral Poor Not applicable Contract Life Cycle Management 6% 32% 28% 20% 14% Contract Negotiations and Authoring 6% 29% 31% 16% 18% ESG/Sustainability Management 3% 24% 30% 17% 26% Performance Management 4% 26% 30% 21% 20% Project and Action Management 2% 17% 19% Risk and Compliance Management 5% 27% 35%
What type of systems do you currently use to support supplier management activities? Dedicated System/Solution Excel/SharePoint/Teams No System Other System Contract Life Cycle Management 56% 22% 19% 3% Contract Negotiations and Authoring 39% 33% 26% 2% ESG/Sustainability Management 20% 38% 39% 3% Performance Management 18% 53% 26% 3% Project and Action Management 19% 53% 25% 3% Risk & Compliance Management
investigated in our research over the years is the degree to which organisations support their supplier management activities through technology, be it a dedicated solution or through desktop-based tools (such as Microsoft Excel, SharePoint and Teams etc). This year’s responses indicate a mixed use of technology. There are some supplier management activities for which a dedicated system/solution is reported by all respondents, namely for sourcing management (59%) and contract lifecycle management (56%). Furthermore, when looking at Leaders only, this expands into contract negotiation and authoring and risk and compliance management (both at 61%). Only 33% of respondents use dedicated solutions to underpin risk and compliance management. A slight decrease on last year (36%). Given that risk continues to be a major driving force in supplier management, we would have anticipated an increase in this percentage. Key aspects of supplier management such as performance management, supplier governance and relationship management are predominately handled using desktop-based tools across all respondents. Only 19% of respondents have a dedicated system for performance management, which decreases to 17% for supplier governance and relationship management. There is a significant reliance on desktop programs to manage these activities and derive value from them. Finally, it is worth also noting the area where the majority of respondents use no system to support activities is ESG/sustainability (39%). Upon closer inspection, this is largely driven by Fast Followers (24%) and Followers (48%), this omission may be indicative of the maturity levels of these groups. The fact that only 32% of Leaders have a dedicated solution in this area indicates an opportunity.
Key statistics
of Leaders have a dedicated system in place to support contract life cycle management. 82%
77%
This year’s research illustrates that there is still a significant opportunity across maturity levels to better utilise technology to support and underpin supplier management activities. We see adoption of dedicated solutions within certain areas, but there is still a strong reliance, even with Leaders, on desktop solutions such as Excel/SharePoint/ Teams. of all respondents believe the main advantage of effective supplier management technology is to support performance management. Only 34% of respondents report that they happy with their current supplier management systems.
33% 32% 20% 16% Sourcing Management 59% 25% 14% 1% Supplier Data Management
44% 34% 19% 3% Supplier Governance & Relationship Management 17%
47% 33% 3% Satisfaction
33% 30%
Regardless of how organisations manage their activities (dedicated solution versus desktop tools), respondent perception on their satisfaction was insightful. Of all the supplier management areas, only sourcing management had 40% or more respondents rate their systems as good or excellent (at 50%). Looking at the results from both a maturity perspective and against the types of system used, there is a light trend indicating that Leaders are more satisfied with their systems (perhaps routed in the fact they are more likely to have dedicated solutions or well-developed desktop
17% 15% Sourcing Management 9% 41% 27% 14% 9% Supplier Data Management 7%
28% 33% 19% 13%
Supplier Governance and Relationship Management 4%
25% 28% 19% 24%
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