Six pillars for successful SRM (Part 5)
SRM technology is a key enabler to effective SRM
Technology is an important enabler to creating sustainable SRM. It can facilitate better relationships between companies and suppliers, delivering big gains on both sides. Effective SRM technology can help the bottom line. More than two thirds of companies with IT systems that do a good job of supporting SRM report seeing supplier performance improvement as a result.
More than 70% of leading organisations we surveyed last year use IT to actively support the management of key supplier relationships. The unifying power of technology offers considerable potential to improve consistency across organisations by ensuring everyone who interacts with suppliers, not just procurement, has access to the same information and the same guidelines for interaction.
It would be inconceivable for an organisation not to use technology to manage the complexity of their key customer relationships, and yet still many organisations who are heavily dependent on their suppliers do not use technology to manage these relationships.
Best in class SRM technology
For many years so called ‘procurement’ technology has focused on the tendering and sourcing process; procure to pay including requisitioning etc. and to some extent contract management but predominantly as a document repository. For life post contract these systems have very limited functionality.
Best in class SRM technology will encompass all areas of supplier management including risk, contracts, performance, innovation and relationship management.
Developing your SRM technology strategy
Working within this 5th Information and technology pillar organisations can explore what technology can do to expedite more effective and efficient SRM. An IT strategy should define requirements in terms of the ‘must haves’ such as governance; contract management; performance and risk management that represent the solid foundations of SRM referred to in our governance and process blog. These then combine with the functionality that will help deliver the broad SRM value proposition including collaborative working; information management; innovation and value release. Armed with this knowledge a technology business case can be created.
Key activities aligned to this pillar include:
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Development of an IT strategy
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Definition of requirements
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Current technology capability gap analysis
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Alignment of a preferred solution
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Creation and approval of a business case
The information and technology pillar has the strongest link to governance and process in that it will provide the platform and to some degree the template for effective governance. In addition, if technology is used beyond governance and to create a genuine shared workspace with suppliers it will also strongly support the relationship development and culture pillar.
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