SRM can transform a business, purchasers agree

20 March 2013

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20 March 2013 | Adam Leach

Developing and investing in a supplier relationship management can have a transformative impact on a business, according to buyers.

At a debate, hosted under Chatham House rules by 4C Associates this morning, an audience of senior procurement professionals heard presentations for and against the motion, ‘Effective supplier relationship management can provide step-change impact to a business’.

Arguing in favour, a senior and experienced procurement consultant told the audience SRM can produce robust benefits for the business. “When implemented in the right way, it can take the bad away, it can increase the potential value you can share across the parties and it stops people working against each other. It gives you shared objectives and a mutual benefit,” he said.

Arguing against the motion, a senior buyer within the financial services sector cautioned while the buyer might see SRM as a way to increase collaboration, the supplier might view it as your potential Achilles heel. “If you’re a FTSE 350 organisation and you’d like IBM to be your strategic supplier, what happens if they think you’re an exploitable customer? They might even think you’re a nuisance customer. How is that going to produce an effective relationship if you have a mismatch in objectives?”

The audience aired a range of views in response to the motion, ranging from the difficulty of being able to sell the benefits of SRM to their executive leadership teams, whether SRM is best focused on big spend areas or critical categories, and the huge importance of the personal characteristics of the people representing both parties.

At the conclusion of the arguments, the motion was carried with a slight majority.

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