Ungated: 2023 SRM Research Report - Extended Enterprise

TECHNOLOGY SUMMARY OF INSIGHTS

2023 GLOBAL SRM RESEARCH REPORT

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Contract management remains the process where most companies have invested in technology. Despite this, around 1 in 10 companies are still not using any systems. Following the increased emphasis on supply chain resilience and risk management due to the COVID-19 pandemic, there has not been an expected increase in the use of technology to help manage risk. The data needs of effective performance management are still not being met by sufficient investment in technology, with over half of respondents’ heavy reliance on desktop tools and only 24% using a dedicated system. Technology in support of supplier management is delivering some tangible business benefits. The leading was performance management, where 76% of respondents reported a positive impact. This is followed by risk

to provide feedback on what technology they currently use to help key aspects of supplier management. Note: For the purposes of this analysis, Microsoft Excel, SharePoint, Microsoft Teams, etc, are grouped together as desktop tools. Analysis of the landscape reveals that contract management continues to be the process where most companies have invested in technology. This is one of the easier technology business cases to develop as it’s possible to demonstrate both resource savings and risk avoidance. Despite this, around 1 in 10 companies still do not use contract management technology. Supplier onboarding is the next process most supported by technology, with 60% of companies reporting a dedicated system. This figure is surprisingly low given that most ERP systems will have a supplier onboarding module.

Other important aspects of a comprehensive supplier management approach are falling well behind when it comes to technology where there remains a high dependency on desktop tools. At the bottom of the list is innovation management. This opportunity – so often identified as a key driver for supplier management - still lacks serious investment in technology to help make it happen. A note on Leaders Feedback from Leaders is more encouraging. For example, they are more than twice as likely to invest in performance management technology compared to Followers, but they still show significant room for improvement. It’s worth noting the feedback from 2022 when it was revealed that Leaders are far more likely to invest in 3rd party systems and solutions rather than developing them in-house or using desktop tools. A note on desktop tools This analysis should in no way be seen as a criticism of the various desktop tools available, and indeed, their use has been invaluable as a means to develop thinking around the capture and reporting of supplier management data. However, since they are not specifically designed for supplier management, they lack key features provided by dedicated

What aspects of supplier management are enabled by technology? (All respondents)

Dedicated System/Solution Excel/SharePoint/Teams No System

Key statistics

Supplier management technology remains an area where there is general under-investment. While Leaders are investing more, there still appears to be a reluctance to transition from a reliance on desktop tools for basic supplier management activities such as performance and risk management. Innovation management and CSR/sustainability are still under- represented regarding technology solutions being implemented. of Leaders use a dedicated contract management system. 80% 1 in 10 companies are not using a contract management technology solution. 62% of respondents report their top business problem requiring a technology solution is information management.

Supplier Onboarding/Master

Contract Management

10%

15%

28%

25%

62%

60%

Performance Management

Risk Management

23%

23%

24%

36%

41%

“Performance management needs to be data-driven, but only 24% are using a dedicated system.”

53%

management, where 62% report that investment in technology is helping them reduce and mitigate risk. The search for technology solutions to business problems continues, where information management is seen as the top requirement by 62% of respondents. There are an increasing number of third-party data sources that make the task of risk management easier. However, these are generally underutilised. Technology landscape Supplier management consists of diverse activities, from the initial onboarding of suppliers through operational and strategic management to eventual exit processes. This is possibly one of the reasons why so few single solutions have been found adequate to support the needs of the entire life cycle. To understand this landscape better, we asked companies

Following the increased emphasis on supply chain risk management that has resulted from the COVID-19 pandemic, we would have expected to see increased investment in technology to help manage risk. While there has been a slight increase compared to 2022, this has mostly been the adoption of desktop tools rather than specialised systems, where just 36% of companies have them implemented. Analysis of the governance pillar revealed that performance management is still not sufficiently embedded as a fundamental supplier management practice, where it should serve to mitigate risk and drive improvement. Effective performance management needs to be data-driven, but it is still not utilising technology. Over half of respondents reported a heavy reliance on desktop tools, with only 24% using a dedicated system.

CSR/Sustainability Management

Relationship Management

17 %

18 %

systems. In our view they can have particular issues with usability, transparency, audit-ability, and security.

40 %

44 %

38%

43%

Technology in support of supplier management is delivering some tangible business benefits.

Rebate/incentive management

Innovation management

10%

65%

6%

54%

36%

29%

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