Overcome the 3 common challenges faced when implementing Supplier Relationship Management software
March 9, 2017
Successful IT software projects are notoriously difficult to deliver. One report suggests that 37% of all projects are at risk of failure – and a further 6% are terminated before delivery. The very complexity of a supplier relationship management software deployment project means that there are several potential points of failure.
Research conducted by Adjuno has identified the top 3 challenges and how your business can approach each of them.
- Overcoming the dominant role of cost versus perceived value
For many businesses, the need to protect profit margins is the dominant consideration in day-to-day and strategic planning. Every aspect of every project has a monetary value attached – and this can blind senior decision makers.
As the costs of a supplier relationship management solution (SRM) project mounts up, it becomes harder to look past the balance sheet – particularly as the return on investment may take years to be fully realised, and even then a direct ROI is often hard to identify as many of the activities are managed by various different people, processes and documents. Therefore, after deployment, many will feel that their supplier relationship management software has been nothing but a money pit. A PWC report states that 25% of businesses report that there is too much focus on costs, rather than the value created by SRM software.
The answer is to take a long-term view of the project from the outset. There is definite return on investment over time – but senior management need to be aware that SRM software is a long game with significant benefits such as greater organisational transparency, collaboration and even speed to market, for those businesses who work through the initial costs.
- Your employees will need training to acquire essential new skills
New SRM software requires a range of new skills for successful deployment, maintenance and day-to-day operations. As well as learning how to use the new system, your employees will need to acquire SRM-specific skills; if those skills are not in place when the system goes live, the learning/productivity curve may be too steep.
Failing to have the correct blend of SRM software skills will increase the overall cost of the project – and the chance that financially focused managers will declare the program a failure. Your project plan needs to make provisions for acquiring the necessary skills – and not just in the use of the supplier relationship management solution either. Your stakeholders must understand the individual processes and concepts that the application enables, or they will struggle to use it effectively.
Don’t skimp on funding for consultancy services, particularly in the early stages of the deployment. This expertise could make the difference between success and failure of the project.
- Aligning different departmental objectives for SRM software
All of your stakeholders will have different objectives for the chosen supplier relationship management solution. Finance will want to see immediate cost savings, the service team will want to streamline operations to create a better experience for customers. Any shortfall on expectation – realistic or not –maybe seen as a failure of the overall project.
From the outset of the project it is vital that stakeholders agree on a common set of objectives. Having these discussions early will ensure that everyone is heard and that their concerns are factored into the SRM solution. These objectives will also form the success indicators for the overall project – no one will be able to argue that the system is a failure if agreed and outlined objectives are being met.
Deploying supplier relationship management software is a strategic risk if these three concerns are not addressed. With strong, transparent leadership, access to outstanding skills, and some well-defined organisation-wide objectives, your business will be in the best position to succeed.
For more help and advice, please get in touch.
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Customer Success Stories
We have found them to be an excellent business partner. Through the implementation of both their supply chain and sourcing software they have more than proven themselves in giving us a product that functions the way we need it to. LIMA has been a fantastic supply chain visibility tool, calculating real accurate landed cost position throughout the order lifecycle. The LIBERTY software matches our product sourcing business needs perfectly. PLM systems I’ve previously used, often bring lots of issues through implementation, but these guys managed this and I’ve got highly satisfied users.John Amm - GM Global Sourcing, Myer
The solution has realised more benefits than we initially thought possible. Claims notifications are being handled in a fraction of the time. Suppliers are making fewer calls into the office and quality scores have increased dramatically. All of this can only have had a positive impact on the customer experienceMartin Ashfield, head of commercial property claims, AXA
The system alerts us to exceptions against our plan, allowing us to focus our attentions on solving the real issues in the supply chain. Having a comprehensive audit trail of events for everyone to see has resulted in significantly improved service levels from our suppliers and agents.Darren Walker, head of generics buying and UK trading, Alliance Healthcare
Now our buyers can exchange photographs with suppliers and have a real-time dialogue as they develop styles, while buyers out in the Far East can send detailed and accurate information back to their teams in the UK. It has certainly cut lead times and reduced errors.Maxine Walter, supply chain co-ordination manager, New Look
The time it takes to compile reports has been significantly reduced; a report which used to take five whole days to complete is now accomplished within a single day!Sam Brown, Responsible Sourcing Co-ordinator - John Lewis.