supplier relationships in the new technology landscape · digital srm supplier relationships in the...
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1© 2015 State of Flux Ltd
DIGITAL SRM
Supplier relationships
in the new technology
landscape
State of Flux 2016 global SRM research report
SRM TECHNOLOGY BY
2© 2016 State of Flux
Head quartered in London and with offices in Sydney, Melbourne, Auckland, Zurich, Athens and Chicago, State of Flux has been supporting clients in procurement for over 12 years.
Supplier Relationship Management
Contract Lifecycle Management
Sourcing and Category Management Con
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In partnership with
Our service delivery model
Consultancy and research services
SM technology by
www.statess.com
3© 2016 State of Flux
OUR CREDENTIALS
4© 2016 State of Flux
2006 to 2016 A PERIOD OF UNPRECEDENTED GLOBAL CHANGE
Economic fortunes of individual countries and the wider world have changed
The platform on which economic success is based has changed for many countries and companies
Emerging economies / stalled economies / crashed economies / re-emerging economies
Geo-political upheaval
The way we work – the way we play – the way we live
Technology has played a vital role in this change
Catalyst and instigator of change
Enabler for change
5© 2016 State of Flux
SUCCESS IN 2017 AND BEYOND
To survive and to thrive, companies must become more innovative: in products and services; in their relationships with customers; and
in their processes and business models.
Successful companies in 2017 and beyond will need to innovate and execute
Relationships with suppliers will be vital to both
Innovation is more than just ideas
An idea remains just an idea until it results in change
6© 2016 State of Flux
Tactical buying
Strategic sourcing
Category management
SRM
1980’s 1990’s 2000’s 2010’s
THE EVOLUTION OF PROCUREMENT
Buying office
1970’s
Proving the toughest
transition?
7© 2016 State of Flux
?
2009
2010
2011
2012
2013
2014
2015
8 years
Over 1500 different companies
Over 750,000 data points
SUPPLIER RELATIONSHIP MANAGEMENT(SRM) GLOBAL RESEARCH
2016Published in
October
SRM
Supplier relationshipsin the newtechnologylandscape
8© 2016 State of Flux
2016 GLOBAL SRM RESEARCH
More than 25 industry sectors represented
275 respondents
55%
16%
22%
5%
1%
1%
NORTH AMERICA
EUROPE
LATIN AMERICA
AUSTRALASIA
ASIA
AFRICA
STATE OF FLUX OFFICES
9© 2016 State of Flux
SIX PILLARS OF SRM
We’re able to assess maturity across these six key areas
VALUE
STAKEHOLDERS
GOVERNANCE
TECHNOLOGY
COLLABORATION
PEOPLE
VALUECO-CREATION
10© 2016 State of Flux
2016 SRM global maturity and benchmarking
1.6
FOLLOWERS OTHERS
+ 0.3 + 0.3 + 0.2
LEADERS
2016 SRM INDEX1.63.14.5
Change since 2015
Leaders
Followers
Others
11© 2016 State of Flux
What has been the most stubbornly consistent feedback?
2012 to 2016 SRM global maturity and benchmarking
2012 2016
12© 2016 State of Flux
WHAT OUR RESEARCH REVEALS
• Cost reduction and avoidance• Risk reduction• Supplier innovation• Operational improvement• Supplier preferential treatment
95% of leaders have created a value proposition
10% of respondents are reporting post-contract
financial benefits of more than 6% while a another
20% claim over 4%
Benefits realised
A good value proposition is key.
Top 5 business drivers for SRM
13© 2016 State of Flux
WHAT OUR RESEARCH REVEALS
55% of leaders report strong and active support
from senior management
Senior stakeholder support
60% of companies say their CEO is supportive of
SRM but only 17% say they are actively involved.
Business and operational support
While over 70% claim to have support only 10%describe it as strong and active
Supplier are stakeholders too
Support for SRM is strong in around 80% of suppliers
Its higher for leaders at 95% who are also more likely
to have carried out a Voice of the Supplier
14© 2016 State of Flux
WHAT OUR RESEARCH REVEALS
87% of companies have segmented their suppliers
Working with the right suppliers
Most segmentation is objective but doesn’t sufficiently involve the business
Only 36% of firms have contract management in
place for the majority their key suppliers
50% of firms are failing to embed effective
performance management
Just 48% of companies believe they have effective
risk management in place for more than half their key suppliers
Foundations of good supplier management
15© 2016 State of Flux
WHAT OUR RESEARCH REVEALS
Outside of leaders and followers, only half of
businesses have yet to define the SRM role.
The role, skills and training
SRM leaders are far more likely to have investedin skills development
Leaders are almost twice as likely to treat SRM as a
dedicated job.
Strategic thinking and Influencing top the SRM skills
shopping list
A big gap exists between training demand and supply
in some of the key SRM skills areas
16© 2016 State of Flux
WHAT OUR RESEARCH REVEALS
Less than half of businesses share company strategy
with suppliers and only 38% talk about end customer
needs
Openness and transparency
3/4 of businesses say they are looking for supplier
Innovation but only 1/3 have an effective innovation
management process in place and less than 1 in 10use technology
Innovation
Only 30% of businesses conduct 360° reviews of
alignment and compatibility
Only 40% of companies create joint business plans with
key suppliers
Alignment
17© 2016 State of Flux
“Little of the post-contract supplier management landscape is enabled by technology”State of Flux global SRM research report 2016
18© 2016 State of Flux
2016 TECHNOLOGY QUESTIONS
Supplier management activity regarded as important or very important to be enabled by technology [IT’S IMPORTANT]
SUPPLIER INFORMATION MANAGEMENT
CONTRACT MANAGEMENT (SUPPLY SIDE)
PERFORMANCE MANAGEMENT
BENEFITS CAPTURE & REPORTING
CSR & SUSTAINABLILITY MANAGEMENT
INNOVATION MANAGEMENT
SUPPLY CHAIN RISK MANAGEMENT
RELATIONSHIP MANAGEMENT & COLLABORATION
SUPPLIER MANAGEMENT ACTIVITYIT’S
IMPORTANTGOT IT
CAPABILITY GAP
Supplier management technology solutions in place [GOT IT]
-21%
-47%
-48%
-57%
-72%
-76%
-76%
-84%
85%
77%
74%
68%
72%
56%
47%
43%
62%
41%
39%
31%
19%
13%
11%
7%
19© 2016 State of Flux
4%
36%
52%
9%
VERY STRONGLY ADEQUATELY POORLY VERY POORLY
Where you are using IT systems how well do they support supplier management?
Just 4% rate technology support for SRM as strong
Over 60% describe it as poor or very poor
Frustration is palpable – Poor functionality and usability of IT is highamongst the barrier to better SRM
2016 TECHNOLOGY QUESTIONS
20© 2016 State of Flux
Failure to get an effective post contract supplier management solutionon to the technology roadmap has resulted in a DIY culture using toolsthat are 15 years old.
63%
75% 50%
54% 20%
2016 TECHNOLOGY QUESTIONS
21© 2016 State of Flux
WHAT CAN TECHNOLOGY DO FOR SUPPLIER MANAGEMENT?
› Drive structure and consistency across the company, departmentally and geographically
› Change people's behaviour allow them to work using multiple devices, whether desktops, tablets or smart phones
› Create rigour in managing relationships and enable remote oversight
› Provide instant access to data describing performance and other interactions
› Analyse massive volumes of data
› Enable collaboration through seamless sharing of information within and across organisational boundaries
› Engage stakeholders via surveys and feedback
› Accelerate and deploy supplier innovation
22© 2016 State of Flux
The innovation dichotomy
50% of respondents say that more supplier innovation is an
important business driver behind improving SRM
75% of respondents say they are actively looking for supplier
innovation right now
Just 33% of respondents say they have an effective process
in place manage innovation
WHAT CAN TECHNOLOGY DO FOR SUPPLIER MANAGEMENT?
23© 2016 State of Flux
›You can’t force it
›You can create a better environment where it can flourish
›You can enable it better when it does – technology can help
› Share and manage information› Improve communication› Provide structure and rigour› Accelerate implementation
43% 7% 84%
Remember this?
WHAT CAN TECHNOLOGY DO FOR INNOVATION?
24© 2016 State of Flux
IS IT A MYSTERY WHY SUFFICIENT INVESTMENTIN SRM TECHNOLOGY HASN’T BEEN MADE?
Yes and No
Yes in that its almost unthinkable that any other business process with so much risk and value at stake wouldn't be fully enabled using technology
No in that many companies have not fully made the case for SRM and gained sufficient support from the C suite
MAKE THE CASE FOR SRM AND THE TECHNOLOGY BUSINESS CASE MAKES ITSELF
Thank you
SRM TECHNOLOGY IS
For more information or to book a demo visit the State of Flux stand or contact [email protected]