The Need for Supplier Relationship Management Education

Capgemini recently announced some of the findings of its most recent research into supplier relationship management in a news release released last month. The findings demonstrated that a significant disconnect still exists in the state of the art of purchasing systems and the state of the practice. Although it found that businesses could expect to save 10-25% on their purchasing costs with an effective systems, it found that less than 50% of SRM users use the application to track orders and only 7% of purchasers use the reporting functions.

The study, which looked at priorities for global Chief Purchasing Officers (CPOs) from six different European countries in a wide cross-section of fields, also found that although many purchasers use spend information to prepare contracts, less than 40% can access the spend information in their SRM application and 30% said that they would need training to use the SRM application effectively.

Although neither the news release, nor the subsequent write-up on the European Leaders Network, discussed the issue, this indicates to me that business are still overlooking one of the key elements to success with any business system – user education.

Supplier Relationship Management, defined as creating an all-encompassing strategy where suppliers connect to your business in real-time, enabling you to gain control of your companies’ direct and indirect spend, transforming suppliers into business partners and extending applications to create value, can be greatly enhanced when well designed systems are used (providers include Apexon, SAP, and Vinimaya), but only if the users know how to use the system effectively. Make sure extensive training is included as part of your deployment plan and you may find that you are one of the top performing companies achieving a 20% plus return.