The reason so many SRM programmes fail to deliver

 

Why So Many SRM Programmes Fail

By Celia Sgar, Seasoned Supplier Relationship Management Consultant and Resident Contributor at SRM Today.

Start with the part nobody says out loud. When an SRM programme collapses, the supplier almost never killed it. The buyer did.

Supplier Relationship Management is one of the few things in procurement that returns more than it costs. Run properly it lowers risk,...

pulls supplier ideas into the business, and collects value out of contracts you have already signed and paid for. The business case has been sound for twenty years. That was never the problem. The problem is that most programmes fall over within a few months of launch.

I’ve spent 16 years in IT vendor management, on the client side and the supplier side. I’ve sat through more than 800 supplier reviews across 8 countries. After enough of them you stop seeing 800 separate failures and start seeing the same seven, in roughly the same order, doing the same damage. They are not seven problems. They are one problem wearing seven costumes, and each one makes the next one worse. Here is the sequence:

1. Nobody senior actually owns it

The programme gets filed under procurement admin. No executive puts their name to it, so it gets no air cover, no budget line of its own, and no authority to pull other functions into the room. It survives on goodwill. Goodwill is the first thing cut when the year gets tight, and an unsponsored programme is the easiest cut on the list. Everything below this point is downstream of this.

2. Governance turns into theatre

Launch energy is real. The first quarter has proper QBRs, a live action log, updates going up the chain. By the third quarter nobody prepares. The review becomes a slide-read, the actions carry over unclosed month after month, and attendance quietly drops to whoever couldn’t get out of it. The meeting still happens. It just stops meaning anything.

3. The scorecard measures everything and tells you nothing

Thirty-plus metrics land on a single page in the name of rigour. What you get is noise with a RAG status. Worse, the moment a metric becomes the target, the supplier manages the metric rather than the outcome. This is Goodhart’s Law arriving on schedule: the SLAs go green while the relationship rots underneath them. Four lenses carry almost all the real signal, which are operational delivery, partnership behaviour, innovation, and commercial. Everything past that is usually there to look thorough.

4. Everyone owns a piece, nobody owns the relationship

Procurement owns the contract. The business owns delivery. The centre of excellence owns the framework and none of the authority. So when the relationship needs someone to make a decision and carry it, there is nobody. A relationship split five ways is not governed. It is orphaned.

5. The tooling cannot see a relationship

Most SRM still runs on ERP modules and a set of spreadsheets. Those are built to process transactions, and they do it well. What they cannot hold is three years of performance history, sentiment, commitments made in a room, or the slow drift of a relationship going cold. If your tooling can only see this month’s invoice, your programme can only react to this month’s fire.

6. Suppliers give their best to whoever runs the best programme

Vendors are not sentimental. They read your programme in about one meeting and decide how much of their good stuff to bring. Run it as compliance and they will meet you with compliance: a junior account handler, last quarter’s deck, and none of their sharper thinking. That thinking still exists. It is going to the client who asks better questions and visibly acts on the answers.
And here is the part that should sting. While you run a light-touch SRM programme on your supplier, that supplier is very likely running a professional Key Account Management operation on you. Their side has a named account director, a budget, a plan to grow your spend, and a view on which of your stakeholders to cultivate. Your side has a quarterly meeting nobody prepped for. One party is managing the account seriously, and it is not the buyer.

7. The value was always in the bit you stopped watching

Sourcing is where the promises get made. Signature is where the attention leaves the building. Procurement rolls to the next deal, the executives who turned up for the kick-off drift off, and the relationship settles into a transactional hum. The trouble is that the value you signed for was never in the contract document. It lived in the delivery that came after it, in the post-signature layer where static terms meet dynamic operational reality. That is precisely the layer everyone stops governing, which is why the savings in the business case so often fail to show up in the accounts.

The actual root cause

Read the seven back and the pattern is hard to miss. Not one of them is the supplier’s doing. Every one is a choice the buying organisation made about how seriously to run the thing.
Treat SRM as administration and you get busywork with a scorecard. Treat it as a managed function, with a senior owner, a spine of governance that actually holds, and tools that can see the relationship, and it behaves like the asset it was always meant to be. Left alone, a supplier relationship depreciates. That is the default state, not bad luck. SRM is the only thing that arrests it, and only if someone runs it like they mean it.

Before your next review

Three questions, answered honestly rather than diplomatically.

• Does a named senior leader own this, or is it a procurement side-task with no air cover?
• Does the scorecard give you insight, or has it become a target your suppliers now manage on your behalf?
• Do your suppliers bring you their best people and their best ideas, or have they quietly decided you are a compliance exercise?

If the honest answers are the wrong ones, the programme is already failing. You simply haven’t booked the post-mortem yet. The better news is that every one of these is a decision, which means every one of them can be decided differently, starting with the next meeting already in the diary.

Which side of that do you want to be on?

About the Author

Celia Sgar is the founder of Vendor Manager Hub and Vendor Score IT, helping Vendor Managers move from reactive firefighting to strategic leadership. With more than a decade of experience, including work with PepsiCo, Nestlé and Danone, she focuses on practical governance, stronger processes and elevating Vendor Management into a trusted business function.