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SRM: should it be taken seriously?

September 9, 2021

In a World Commerce & Contracting poll, more than 80% of business executives said that Supplier Relationship Management is an ‘important’ or ‘essential’ discipline. That’s perhaps not surprising, given the continuing headlines about supply chain disruption and shortages. Gaining better insight and control over supply, becoming a priority customer, even better understanding the next threat, are understandable priorities.

But when executives talk about ‘a discipline’, does that immediately translate to a specific role or business function? Is there a readiness – or perceived longer-term need – to invest in building capability? 

A readiness to invest 

The answer appears to be yes, since a little over 60% of those executives indicate that they either have or are about to expand capability. However, the route to improvement varies. Many associates improved discipline with better integrated technology and more robust data exchange. For them, digitization is key. Yet even those who see this as the way forward recognize the critical role that people will play – whether that’s analysts to make sense of the data, or relationship managers to build increased collaboration with the supply base, or process designers to ensure organizational and systems coherence.

How can we move SRM forward?

With the sense of urgency that these findings imply, why is SRM not more widely recognized and adopted? Several factors appear to be at play:

– for many, the role and purpose of SRM remains poorly defined.  Piecemeal SRM or “figuring it out along the way”, is not SRM and certainly does not provide ‘a discipline’.

– as a cross-organizational discipline, attempts to develop SRM capability often fall foul of internal politics; teams lack the skills to define ownership and manage the collaboration.

– very few people have received meaningful training to lead or perform SRM activities;

– in the absence of clarity or training, many see moving into an SRM role as risky. It may look interesting, but where will it lead?

At World Commerce and Contracting, we work with a growing number of groups to make sense of this confusion. We were well positioned to act, having developed a body of knowledge supported by skills assessment and certification standards almost 10 years ago – the first such program in the world, backed by solid research.

The path ahead

Today, we see the SRM discipline evolving to ensure delivery of value and control through the integration of contracts, relationships and governance. The combination of these three elements provides a coherent and consistent mechanism to work with key suppliers for mutual gain. However, while better systems are an important contributor, it is a consistent body of knowledge, drawing on proven methods and techniques, that is proving critical to success. This is true whether or not capability is developed through dedicated personnel, or as an adjunct to existing responsibilities.

Is there an ROI? The answer is clearly yes. Well-managed SRM has been shown to deliver significant cost benefits through improved market control and grasping opportunities for improvement. Today, as the poll of executives revealed, the benefits go further. They are increasingly focused on building strong, open and collaborative relationships, mitigating risks through improved problem-solving and identifying potential for innovation. 

In response to the market’s urgent need for low-cost, rapid and highly interactive learning, World Commerce & Contracting have supplemented their self-paced SRM training and certification with a new facilitated program see details at

https://www.worldcc.com/Learn/Professional-Certification/Supplier-Relationship-Management-Certification

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