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SRM in the Doldrums

This week I was in London again. This time to attend, and also speak, at the eWorld Procurement and Supply conference and exhibition at the QEII Centre in Westminster. I’ve attended this event several times now, and spoke from the main stage about four years ago. This time I’m on the hook to talk about Supplier Relationship Management (SRM).

The audience at this event must, by my reckoning, average about 35-40 year old. Time was when I would go to a procurement-themed conference and the age profile would be older, but eWorld has a younger demographic because of the focus on procurement technology. There are companies jostling for attention, hoping to position themselves profitably during the continued shakeout of the sector. Winners all, as they’re successfully growing the market for digital solutions amongst procurement organisations. Dominate, and a company can take-on all-comers; fail to attain that position, then there’s still a good chance of being bought-up, leaving the directors with a handsome payday.

My slot, the ‘SRM Clinic’ was to be a 90-minute session in two parts. Slightly unfortunately it was scheduled for the afternoon, when people are feeling a little jaded and considering an early train home. Although my session was over-subscribed, there were still a couple of seats left empty in the first part, but it was full for the second.

I steered the session discussion through the scope and purpose of SRM, money and targets, stakeholders and their requirements, the SRM process, and finally, skills, organisational set-up and passing reference to technology to support the whole effort.

The session was most enjoyable. I felt I spoke with clarity and high energy, and there were many good questions and comments from the audience. Like always, more time would have been nice, but as this was a conference and not a training session; that’s just the nature of the beast.

Listening to the audience, what was striking was how under-cooked SRM practice seems to be in the organisations represented. And I have little doubt that this reflects the wider community of practitioners. Furthermore, even when there has been some ambition shown (as one attendee also observed), efforts are not sustained and so it leaves SRM as a fringe issue for most procurement leaders (and their stakeholders). Disappointing.

Despite all of the attendees at my session acknowledging that suppliers never provide perfect service and contracts always leak value, there is mostly fatalism around the issue. Having to spend significant time and resources managing mediocre or poor supplier performance is just considered business-as-usual. It’s enough to make you wonder whether the profession has progressed at all in this regard over the last decade or two. The answer to that seems pretty clear to me.

Moreover, it leaves me reflecting on my own contribution to the procurement debate. Are practitioners listening to seasoned advisors like me, who aim to speak from first principles? Or are we all drowned-out by the noise of technology providers who often outsource their thought-leadership to professional content writers, even though those writers have the barest understanding of how to do the procurement job? 

I’ve been incredibly lucky - my formative years in the profession were at a time when CIPS (The Chartered Institute of Procurement & Supply) were funding primary research through the universities, and there some outstanding leaders and consultants in the profession. Many of these learned best practice procurement from manufacturing, in particular automotive. Yet many of today’s ‘great and the good’ haven’t been anywhere near manufacturing, and have learned their skills in the service (and Public) sector. 

We’re experiencing a hollowing-out of the procurement profession, with deep understanding and knowledge of ‘what works’, and how relationships are best managed, are all undervalued in comparison to fancy graphics, technology acronyms, and (over) promises of what AI, Blockchain, and Big Data will deliver in terms of business results. 

It’s technology over competence, and I don’t buy it.