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06 November 2014 · Article

Unlocking the Potential Value of SRM Through Effective Governance

While supplier relationship management is increasingly recognized as a strategic imperative, many executives\r
continue to struggle with how much to invest, and where and how to make such investments, in order to maximize\r
returns. the problem of measuring the benefits of srm remains a thorny one, as evidenced in Figure 1.\r
in fact, in our study, the bottom 10% of srm performers (in terms of value achieved through srm) reported no measurable financial benefits from their srm programs in the prior year. While many of these companies were in the very early stages of implementing an srm program, this data also bespeaks the challenges of implementing srm in an effective manner. the good news is that the top 10% of performers reported an average of us $298mm in financial benefits from srm in the prior year. moreover, given the inherent difficulty of successful srm implementation, those companies that are able to 'crack the code' are likely to enjoy a sustainable form of competitive advantage, inasmuch as srm best practices have proven difficult to simply copy or transplant from\r
one organizational context to another.

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