We are pleased to announce that the Supplier Relationship Management (SRM) survey 2012-2013 will be released this year. Over the last twelve years, during which we have conducted this survey, the market for SRM has steadily grown and companies continue today to invest in these critical applications. The growth in this market is a testament to the importance of this survey.
The 2012-2013 Supplier Relationship Management (SRM) survey is based on a series of questions designed to address whether existing software covers a specific set of functions within the SRM functionality. Twenty-nine vendors, each with a global geographical scope and worldwide implementations, participated in the survey. These vendors represent a broad range of applications including applications that provide full coverage for all sub-processes and niche players supporting only selected functionality.
In addition to the vendor survey, which gives readers an overview of the major players in the market, the survey shares the experiences, issues and questions that we see daily as procurement professionals implementing and optimizing SRM. Within the document, our foremost colleagues share their views and experiences on SRM, resulting in expert opinion stories that each offer a different perspective on SRM. Major themes include the Seven Strategies of Procurement Transformation, Digital Transformation in Procurement Transformation, Supply Chain Finance and Market Developments in the SRM market.
A new feature in this year’s SRM survey is the vendor profiles. These profiles describe the participating vendors in greater detail. The descriptions cover information related to their specialization, the total scope of their offering, their distinguishing characteristics compared to competitors, the types of solutions offered (SaaS/In-house etc.), implementations and markets targeted.
Considering the survey as a whole, the following list represents the major findings and conclusions from our research:
- 79% of the vendors surveyed offer e-Sourcing functionality while 76% offer Operational Procurement functionality. While the 2011-2012 SRM research showed that there was still a greater focus on Sourcing than on Operational Procurement, this year the survey clearly indicates that vendors now realize the importance of the Operational Procurement cycle as the backbone of your Procurement process.
- 86% of the vendors provide e-tendering functionality while 66% provide e-auctioning functionality. In line with previous editions of the survey, e-tendering is perceived by all vendors as core functionality while a smaller number of vendors give the same level of attention to e-auctioning.
- Out of all of the vendors surveyed only five vendors do not offer Procurement Intelligence functionality. This is a testament to the importance of tracking operational improvement benefits and assessing and ensuring compliance within an organization. There is however significant diversity in coverage ranging from 97 to 19%. Additionally, none of the vendors surveyed have full coverage of the service offerings, leaving room for more improvement in the coming years.
- Project Management is still a key differentiator in SRM. Vendors either provide functionality in this area (59% of the vendors surveyed) or it is completely absent from their solutions.
- In line with the findings of previous editions, Contract Management functionality is improving even further (90% of the vendors surveyed offer Contract Management). Only four vendors responded with a score of less than 70% coverage in this area, with the average above 84%. The majority of the vendors offer Contract Management in combination with Sourcing and Operational Procurement functionality. However, there are vendors that offer Contract Management solely as an extension to the Sourcing or Operational Procurement cycle. There is even one vendor that offers Contract Management as a standalone module.
- Contract Compliance is still the least developed area with an average 76%. Since Contract Compliance is the next phase after P2P compliance has been achieved or is maturing, we anticipate that this area will only further increase in functionality over the coming years.
- Catalogue Management is an important element of Operational Procurement. Therefore, it is not surprising that the vendors that do not offer Operational Procurement functionality also do not offer Catalogue Management functionality. Catalogue Creation and User Capabilities are the subcategories with the highest functional coverage (average score of 80%).
- This year’s survey shows that some end-to-end suite vendors started to develop External Resource functionality, a sign that this functionality is still growing rapidly. This supports the observation made in the 2010-2011 survey that there is still room for improvement as some end-to-end suite vendors not offering External Resources will start to develop this functionality in the near future. Most of the vendors offering External Resources functionality offer more functionality (average >90%) regarding the first part of the process (Specify, Approvals, Requisitioning), but offer less functionality for the second part of the process (Selection & Order, Monitoring and After Care). Since the demand for External Resources functionality continues to grow in organizations, we expect that this area will further increase in functionality and richness of capability over the coming years.
- BPO remains a strong area for growth with an average of 62%. Procurement Intelligence and Sourcing continue to be a top priority on the list of top 5 BPO based scenarios in use. Contract Management and Catalogue Management are new entrants in the top 5 this year, whereas Project Management and External Resources are lower on the priority list of BPO scenarios.
In our opinion SRM is something which can completely transform your procurement organization if done correctly. Please stay tuned for further reading – the release of the new report will be in October of this year.