State of Flux – supplier relationship management software (as well as the survey)

As regular readers know, we’re big fans of the State of Flux Supplier Relationship Management (SRM)  report, which we featured here and in previous posts.  So recently I met Alan Day, Chairman and founder of the firm, in order to take a look at their Supplier Relationship Management System (which probably needs a snappier name)!  It’s a software product they’ve developed to help organisations implement and manage their SRM programmes.

It was developed initially to meet the needs of a particular large State of Flux client – “we didn’t really intend it to be a stand-alone product ” Day explains.  But it did mean that from the beginning, it has had input from real procurement and supplier management people, so its whole design is around meeting the direct, identified needs of people managing significant relationships. The functionality has grown in response to SRM professionals saying “I really need to be able to do this”, rather than simply developers deciding what it would be nice to add on.

Another way to look at it, Day says, is as the answer to the question – “if I’m meeting my strategic supplier for a major quarterly business review, what information do I need”?  It’s also based very much on collaborative principles. Day reckons that around 70% of the populating and updating in terms of data entry and maintenance can and should be done by the suppliers. That’s a positive:  “they have a real incentive to keep things up to date”.

User profiles determine who can access and see what information, and it is pretty intuitive and easy to use, with tabs, drop down menus and other helpful features you would expect. Users can create a tailored summary page for each supplier, taking different elements from the various functions and modules within the system and from external feeds such as relevant news stories. There are around 20 different options and topics addressed – ranging through governance, meetings, innovation  and many more.

We’re not going to look at all of those here, but we’ll get into a few in more detail. The “Trading” section covers details about the business relationship- a history of spend, and revenue (if the supplier is a customer too – which can be well worth knowing). Looking forwards, future plans and strategy can be captured where that is relevant.

“Governance” covers a “readiness check sheet”, which is a survey to assess how appropriate SRM is with that supplier. It also provides the means to record and communicate governance models, and at a more operational level, allows scheduling of meetings between the parties with visibility across the organisations. Contacts management features mean levels of engagement can be tracked, enabling  stakeholder mapping.  Agreed actions can be classified into various types, so progress towards SRM goals can be easily tracked.

The “Risk” section covers a range of key metrics, from a risk overview to financial metrics (the system can pull in financial rating or other similar external data). Risk assessment surveys are built-in, and there is a joint risk area, which can enable shared assessment and management of issues and contingency plans.

The “Performance” heading covers some of the most important areas, and is one of the most collaborative, according to Day. Hard KPIs can be captured and there are relationship diagnostic tools and surveys within the platform. Interestingly, most users don’t use the surveys in a 2-way fashion i.e. also getting the supplier to assess the buying organisation – which seems like a shame! This section took as long to build as the rest of the platform in total, according to Day. There is certainly and obviously a lot of functionality here in terms of how KPIs and measures can be set up, linked to different factors, then analysed, graphed and so on.  Indeed, it strikes me that this module would be useful in many contract management situations, even if the organisation wasn’t yet ready for true strategic SRM.

There are other sections, but that hopefully gives a good feel for the extent of the product - more general comment about its value in part 2 to follow.

 

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