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"Supplier Relationship Management"
Research shows how srm helps cut admin and attract top staff
The ability to leverage preferred supplier relationships is the most significant driver for 2007, according to new research. Management consultants Capgemini say there is increasing interest in Supplier Relationship Management, including performance measurement and supplier development. But they also warn there is still confusion over SRM.
The research looked at the priorities for global Chief Procurement Officers (CPOs) from six countries for the coming year from a variety of vertical markets. It then looked at the disconnect between these priorities and the current use of purchasing and procurement systems both by businesses in general and by users of the systems.
Purchasing remains a key issue for businesses who could save 10-25 per cent on their purchasing costs with an effective system, depending on the organisations’ spend complexity and maturity of procurement.
Capgemini defines SRM as “creating an allencompassing strategy where suppliers connect to your business in real-time, enabling you to gain control of your direct and indirect spend, transforming suppliers into business partners and extending applications to create value.” The research found that less than half of SRM users used it to track orders, and only 7 per cent used the reporting functions contained in the application. Less than 40 per cent said they could access the spend information on their systems, and a third said they would need training to teach them how to use SRM applications effectively.
Mario van Vliet, global supply chain management leader at Capgemini, said: “There is a lot of confusion in the market about what true SRM is, compounded by the fact it can be complex to deploy and integrate.
“Many businesses don’t spend enough time identifying the business processes and procurement channels that will be affected by an implementation and find that they get stuck half way through the process without being able to realise the predicted cost savings.”
He said companies which had effectively implemented SRM systems found not only that they could reduce the administration involved in procurement but also found compliance much easier.
They could also reduce time to market to help gain competitive advantage and attract better purchasing professionals into their organisations.
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