Part 3 -Is Supplier Relationship management a “technology need” or a “strategic business capability” for your organization?
I thought we would be nearer to the end my blog series on SRM with this one hoping to get onto the solutions, but it was not to be. I was in a couple of solution discussions in SRM implementation situations over last week and realized we were far away from getting to the solution discussions if we do not do more to confirm our understanding on this topic.
What is Supplier Relationship Management for you?
Having been designing Supplier relationship management solutions for the last 5 years for multiple clients, I have witnessed articulations of requirements across industries. This includes one of the solution approaches we designed, which were presented recently in a webinar by one of the leading SRM product vendors as a marquee example of value driven SRM implementations. One thing seen consistent over the years is that our thinking on SRM implementations have not changed much in this time, if we were to go by the requirement definitions we still see in the Rfx’s sections.
We converse about modules to deploy and huge budgets to spend over multiyear implementation contracts.
Why are we doing all that we are doing? Is SRM all that we know of as technology enabled procurement processes or are there more than that meets the eye? What is the end state vision?
What we do with SRM programs has a lot to do with our end state visioning for this capability. A tool as a chopper could be used to cut wheat grass as well to fell huge tropical trees. Let us remember that this is a major value area.
I wanted to know if I was not seeing the real change happening or were we not innovating enough. Decided to put my thought here on how we have been witnessing the SRM program approach and how this could be different on the goals on a business capability approach.
Figure : SRM comparitive goals & tactics
SRM as a technology enabler is neither the start of the journey nor the end. I agree that situation (1) above is a great means to the end but not possibly the end in itself.
Let me know your experiences and how you feel organizations could view the SRM implementations in a strategically different light to make them always competitive in their business strategies.
Comments
Hi Pradeep,
The real change is happening. Based on my interaction with few clients in the last 6 months, organization have started viewing the SRM implementations as a strategic long term focus to facilitate a transformation that will deliver efficient and effective processes. Upon striking a detail conversation with the key decision makers for such SRM programs, we get to hear all the key points that you have listed in Situation-2 - issues, scope, key Qs to address etc. Therefore there is a strong strategic (Situation-2) as well as tactical focus (Situation-1) - a strong Business case for SRM implementation / transformation exists in most of the cases.
But the first issue is, the decision makers, in most of the cases think that, the scope involved here in Situation-2 i.e. strategic, should be managed internally by the organization (not outsourced) and what is typically outsourced is the "IT" part of the transformation. As long as there are skilled resources within the organization, the issue can still be managed.
The second key issue is - both the strategic and the tactical focus team operate in silo. Though there are touch points between them in the program, they are very limited. The actual marriage between these two happens at the end of the program, which is too late. This key issue has to be addressed (may be an integrated plan to start with) and it is essential and need of the hour.
Posted by: Raj Rajendran | December 21, 2009 10:35 AM
That is good news Raj , If Organizations and implementation consultants realize the business angle to the SRM goals it is well half work done . However it is no simple task getting the software tool to acheive the overall long term SRM strategic goals . If research says that 62% of companies to not have a good definition of SRM and 50% do not know how to measure it should be a good challenge . take an example if SRM goals are to improve relationships , we know relationships need to be different by different categories of spend . How many SRM programs really have defined relationships at category level and tracked implementation to the right measures of relationship management . defining overall SRM strategy should be a start point , right , and we say lot of organizations dont have a standard definition . These are real specialised skills which organizations should include in their transformation programs , been a buyer myself for some time in a great organization and I dont see this skills internally existing in most cases. Again transformation is about partnerships and not outsourcing ..
Posted by: Pradeep T Y | December 22, 2009 6:28 AM