2024 GLOBAL SRM RESEARCH REPORT
WELCOME TO THE REPUTATION AND RELATIONSHIP AGE
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Data and information are important, but relationships and reputation are even more so, argues Alan Day Welcome to the reputation and relationship age
“Trust is a cornerstone, and procurement professionals are tasked with establishing and nurturing relationships built on transparency, reliability, and ethical practices.”
Information may still be power but information and data go quickly out of date, while strong relationships stick around, and reputation just sticks. “We’ve created an industry that measures information, but we’re not really measuring reputation,” says Alan Day, Chairman and Founder of State of Flux. “If you look at procurement, even today, most of the time buyers are sourcing based on facts and data, but no sooner than they make a decision the need that they outlined in the tender has probably changed anyway. More than half the time requirements change, so why not try to choose the best partner to work with, rather than the person that can provide the best widget at understand the importance of brand, over and above data. “For our kids, everything is about their reputation, nothing is about managing data. This perhaps is yet to hit the business world - but while we in business have been focused on what information is out there, younger people care more about how that information affects their reputations.” a particular point in time?” He says young people now
It is this shift - the transition from the ‘Information Age’ to the ‘Reputation and Relationship Age’ - that is happening right now and is to bring about a paradigm shift in procurement, he says. This article explores the implications of this shift on procurement practices, which have been traditionally anchored in transactional processes, and highlights the evolving role of relationships and reputation in the modern business landscape.
ethical standing, reliability, and collaborative potential. Reputation is a dynamic and networked phenomenon that aligns with the principles of supplier relationship management (SRM). In the procurement landscape, organisations are recognising that managing supplier relationships goes beyond transactional interactions. Becoming the ‘customer of choice’, as is advocated by State of Flux, involves consistently delivering value, building strong relationships with suppliers, and fostering a reputation for fair and transparent dealings. 3. Elevating supplier relationship management (SRM) Recognising the shift from transactional to relational, procurement must evolve beyond a mere sourcing function. A comprehensive SRM strategy becomes paramount. Procurement professionals are tasked with cultivating long-term relationships with suppliers, emphasising shared values, and fostering collaborative innovation. State of Flux’s work on SRM principles and the concept of being the customer of choice
in which information will have value only if it is already filtered, evaluated and commented upon by others.” Origgi examines the influence of the Internet and social media, as well as the “countless ranking systems that characterise modern society and contribute to the creation of formal and informal reputations in our social relations, business, politics, and academia”. She also highlights the importance of reputation to the effective functioning of the economy and e-commerce.
and organisations to flex, bend and impact reputations becomes paramount. This shift underscores the need for a recalibration in how procurement itself operates in a landscape increasingly defined by reputational currency - with human connections and trust playing an increasingly significant part. Parallels with procurement 1. From transactions to trust The ‘reputation and relationship age’ demands a shift in focus from transactions to trust. Procurement professionals must recognise the centrality of relationships in building trust, valuing reliability, transparency, and ethical practices in supplier interactions.
In the ‘information age’, procurement was often portrayed as a series of transactions, emphasising the efficiency of acquiring goods and services. However, in the reputation and relationship age, the narrative changes. Trust becomes a cornerstone, and procurement professionals are tasked with establishing and nurturing relationships built on transparency, reliability, and ethical practices. 2. Supplier reputation as a strategic asset In the reputation and relationship age, the quality and reliability of information take precedence. In procurement, a supplier’s reputation becomes a strategic asset. Organisations scrutinise not only product quality but also
“Procurement operates in a landscape increasingly defined by reputational currency.”
Reputations are not only formed and preserved but travel through the complex web of social networks influencing and modifying reputations through use of language, rhetoric and narrative. If you’re measuring reputation, you have to understand that complex web and be aware of its impact. And in a world where online presence and digital identity are crucial, understanding the strategies employed by individuals
Theory and practice According to Italian philosopher and tenured researcher Gloria Origgi, author of Reputation: What It Is and Why It Matters, reputation affects every aspect of contemporary life. In her article Say goodbye to the information age: It’s all about reputation now , she says we are experiencing a fundamental shift in our relationship to knowledge. “From the ‘information age’ we are moving towards the ‘reputation age’
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