9 Jun 16

Six pillars for successful SRM (Part 1)

Six pillars for successful SRM (Part 1)

How do I make SRM work in my organisation? This is one of the most commonly asked questions asked by large multi-nationals.

We’ve observed throughout 8 years of research into SRM excellence that there are a range of practices common in most successful SRM programmes. These have been distilled into a model called ‘six pillars of SRM’ which help increase the value and benefits derived from SRM if the activities are implemented effectively. 

Over the next six weeks Mel Shutes our head of SRM will explore each of the pillars in more detail, examining the activities aligned to each and their interdependence with each other. We start here with Business drivers and value.

Business drivers and value looks to align the anticipated value that can be created from SRM and the company’s strategic objectives and business drivers. In other words this is the value proposition for SRM as it relates specifically to your company, making it absolutely clear how SRM will contribute to your strategic objectives. This value proposition should be documented and articulated within an SRM ‘sales pitch’ which will be the vehicle to engage stakeholders.

However, before the link to strategic objectives can be established you need to explore and understand the potential value SRM will deliver. This requires organisations to think of the broader supply side value possibilities such as innovation, reducing time to market, enhancing customer experience etc, as well as the more obvious cost and risk reduction opportunities.

This pillar also covers how you will capture and report the financial and non-financial benefits. Our global research in to SRM practice reveals how the perceived difficulty of quantifying SRM benefits is often identified as a barrier and makes stakeholder engagement a much greater challenge. Defining value and a set of KPIs to measure it is key.

The key activities aligned to this pillar include:

  • Creating the SRM value position, business case and being able to pitch it to senior executives.
  • Developing a benefits capture and reporting methodology

Business drivers and value is linked to other five pillars in various ways but perhaps most strongly to stakeholder engagement and support where the SRM sales pitch is probably the single most important vehicle to secure stakeholder support.

In the next blog we will examine the stakeholder engagement and support pillar.

If you would like to learn more about business drivers and value and how this model could be applied to your SRM programme contact Mel Shutes at enquires@stateofflux.co.uk.


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