Was the introduction of the Ford Model T an improvement or an innovation over the horse drawn wagon?
As an SVM professional, you may ask, “Why is this question important for me?” But as an ever-growing number of companies invest in innovation, they will realize a significant portion of this can come from the existing relationships with suppliers.
Forrester surveyed over 1,000 IT executives and technology decision-makers in Q3 2011 about which priorities will have the most significant impact on this year’s IT services spend. The top answer, at 56% of the respondents, was the need to innovate and grow their business. In fact, innovation rated higher than the ever-important lowering operational costs (40%)!
To execute on these innovation priorities, you — the SVM specialist — must understand the innovation potential of your suppliers and how to leverage this in the future. Success on this endeavor will require setting the stage. SVM pros need to understand the difference between a supplier-driven improvement — that we expect — and a service or business-focused innovation that needs investment and management. SVM pros can start with three key items: 1) Use an innovation screening checklist to understand who to partner with; 2) educate vendors on business priorities and key stakeholders within the business to enable innovation; and 3) manage delivery-oriented innovation as a part of your daily vendor governance.