CapGemini SRM report – a curate’s egg

There’s a steady flow of research papers and thought leadership that emerges from the consulting firms, outsourcers and software providers in our industry. One that caught my eye for two reasons was the recent Cap Gemini Supplier Relationship Management (SRM) report.

The title itself may be misleading to some readers. We tend to think that SRM relates to the specific activity of managing  the organisation’s most critical suppliers, with a focus on value once contracts are running. That’s the way, for instance, that State of Flux with their excellent SRM report define it.

But Cap Gemini use SRM here to mean “procurement” in its widest sense. Perhaps that is because of their strong links with SAP, who have used SRM as a pretty generic title for years. Anyway, getting past that, the Cap report has three elements. The first is a collection of comment and research papers written by their consultants in the procurement space.

The second is a survey of eProcurement software providers. This was how I first came across the report – I started seeing firms advertising with comments along the lines of “we came 2nd in the Cap Gemini global eProcurement survey”.  The final part is a directory of those providers, featuring a page of information about each one.

The research papers vary in their level of depth and usefulness, as you might expect. The first paper  is on the topic of  “closed loop procurement systems”, whereby products a t the end of their life are recycled back into the production process. So this supports the sustainability agenda, although it can only apply to a fairly small subset of what most of us buy I suspect. But this is a good introduction to the topic if it is applicable to your organisation.

The second paper, “Where Usability and Demand Management Meet”, is for me the most interesting in the report. It looks at demand management, a much under-estimated tool in the procurement armoury, as we’ve argued before. It explains what procurement needs to consider in order to implement effective processes in that area. Here’s a short extract:

The procurement function needs to not only be able to track spend compliance (to policy, processes and contracts) and provide intuitive self-service procurement channels (where applicable), it also needs to  have the competence and capacity to understand and communicate benefits of procurement in a  business context.

Unfortunately, this is quite a step out of the comfort zone for many procurement professionals who have often built their careers and reputations on hardline negotiation and policing tactics.

The paper goes on to talk about usability in an eProcurement systems context, as a driver of demand management, and the idea of “Guided Buying”. That is in danger of becoming a fashionable bit of jargon, which is not to say it isn’t worth understanding or indeed considering. Worth reading anyway.

Next we have a piece on Supply Chain Finance (SCF). It is a decent introduction to the topic, but it doesn’t touch on some of the latest thinking – for instance, linking opportunities for dynamic discounting to SCF, and it doesn’t get into the technology issues at all really. Worth reading if you’re new to the subject though.

Finally, in “Procurement and Innovation”, the authors look at the benefits of supplier innovation, and how to balance commercial imperatives with the need to build relationships if you’re looking for innovation. But it then gets into digital contract management solutions, which seems to be a somewhat different topic . So overall, whilst the article is worth a read, it does perhaps try to cover too much ground in a relatively short space.

So that completes the first section of the report; we’ll be back in part 2 to look at the software survey.

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