It turns out value doesn’t just mean financial – it goes way beyond that.
State of Flux’s recent global SRM research report looks beyond financial measures and towards sustainability as companies become more aware of their practices and impact on the planet.
As well as looking at how they can be more sustainable and add more value, companies are looking at process improvements, new innovations and risk mitigations. These are harder to measure, but are a key part of success.
Companies need to focus on a new type of value to protect the environment and contribute to society.
We’ve endured another year of disruption and reflection beyond the pandemic: COP26, the Suez Canal disaster, extreme weather events, financial matters, suffering communities, companies booming, others collapsing and more.
Technology is playing an important part in the way businesses work as more adopt new digital business models and technologies throughout their processes, including procurement. Using new technologies, procurement can shift its role and become more strategic whilst delivering better value for the organization and achieve ESG goals.
Less than 3 in 10 are satisfied with their IT systems that support their supplier management lifecycles, however technologies like automation can generate savings across people and processes, make better strategic decisions and provide better support.
The report emphasises the importance of strong relationships and our reliance on strong supply chains with a need for better visibility to reduce disruption where possible. It also looks at how to find, keep, grow and protect value to help you build the business case for investment into vital supplier management.
Based on the 6 pillars of SRM:
- Value – 76% of leaders managed to quantify financial benefits from their supplier management programme
- Engagement – 94% of leaders said their suppliers understood the value of a supplier management programme for both parties
- Governance – only 13% of respondents said risk management was in place for 75% – 100% of their suppliers
- People – 49% admitted strategic thinking was in need of development
- Technology – 78% said supplier performance management was one of the highest benefits
- Collaboration – a massive 98% of leaders revealed their supplier collaboration has improved thanks to their supplier management programmes
- Revisit your value proposition, value isn’t mono-dimensional
- Close the technology gap
- People development is a process that requires training aligned to business and individual needs
- Increase your focus on building quality relationships with suppliers to serve a better purpose beyond pure financial gain
- Put more time and effort into exploring the ways you can capture, quantify, and report both financial and non-financial benefits.