Is Your SRM Program Just Useless Theater?

We often talk about Supplier Relationship Management (SRM) in academic terms: "We need strategic partnerships." We often treat it as a box-ticking exercise: "We need to schedule a QBR."

But what if we’ve been ignoring the "Relationship" part of SRM for the last 20 years?

In this week’s episode of Proc & Roll, hosts Natasha Gurevich, Conrad Smith, and Zachary Bachir dive into why true SRM remains the "white whale" of procurement. From the "useless theater" of unaligned meetings to the surprising similarities between managing a supplier and managing a superstar employee, the team provides a raw look at what it actually takes to drive value beyond the spreadsheet.

Here are four critical lessons from the episode:

1. SRM is an "Enterprise Sport," Not a Procurement Task

It is a common trap to believe SRM is solely procurement's business. In reality, procurement should only create the framework; the business must own the relationship.

• The Disconnect: If marketing doesn't care about evaluating their agencies or supply chain doesn't care about carrier performance, SRM becomes "useless theater."
• The Fix: Build a platform that makes it easy for stakeholders to see innovate solutions and manage risks, then "market" that value internally until they come to you.

2. Manage Suppliers Like "A-Player" Employees

Conrad notes that the behavior required for good people management is identical to good supplier management.

• Clear Expectations: Just as a superstar candidate turns into a mediocre employee without clear goals, even the best suppliers fail if you don't collaboratively define what success looks like.
• Navigation Help: Unlike employees who you can "hire and step away from," suppliers need active help navigating the "cumbersome" silos of a large enterprise to be effective.

3. Stop Segmenting by "Headache."

Most procurement teams segment suppliers by spend or operational risk, which usually just results in a list of your biggest "tier one" headaches.

• Innovation vs. Compliance: You must separate these concerns. High-risk suppliers need compliance management, but innovation often comes from small, low-spend partners who are culturally aligned with your brand.
• Reverse Materiality: When choosing strategic partners, ask: "How important are we to them?" If you aren't a priority for the supplier, they won't bring you their best ideas first.

4. The "Rule of Two" for Implementation

The most common reason SRM programs fail is that teams try to bite off more than they can execute by launching with 20+ suppliers on Day One.

• Start Small: Pick one or two strategic suppliers and one internal stakeholder who actually trusts you.
• Prove the Value: Run the program for 6–12 months to create a success story. Once the C-suite sees how procurement improved margins or enabled growth, "they will come" asking for more.

Are you ready to stop managing spreadsheets and start managing outcomes?

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Transcript: Proc-N-Roll | Is Your SRM Program Just Useless Theater?

Conrad: Hey everybody, welcome to Proc and Roll, your guide to practical procurement. We're super excited to be back together. The three Musketeers are here: we've got Zach from London, Natasha's in San Mateo in California, and today you catch me over in Hawaii. We are bringing you the best, the latest, the greatest, and super excited to be back with you. Top of everybody's mind today—Zach, what's on your mind? What have you been working on?

Zachary: I think AI is heating up, right? 2026 feels like the year AI needs to deliver value. People are talking about outcomes, how they're going to scale, and how to basically transform with AI across procurement. I find it really exciting. I've been busy helping my company and clients come up with propositions and use cases, and implement pilots. I'm really focused on building out agents. What about you?

Conrad: Wouldn't that be amazing? 2026 is the year AI gets practical instead of just fun and games. That'd be very cool.

Natasha: Sure. Do you guys remember we were talking in one of our episodes in 2025 that one of our predictions was that all CPOs will have to rethink their tech stack? So very cool, Zach, that you are finding the CPOs who are actually thinking the same way we do.

Zachary: Yeah, I know. I don't think it's going to be a long time before every CPO is really heads down in this. We talk about fixing the basics in procurement all the time, but this AI thing is just huge. How are things with you guys? What's on your mind?

Conrad: Very cool. Well, I've been on the road this year. I think I've visited a dozen or more clients. It's been awesome to get out and meet with customers, understand their goals for the year, and see what's working or needs improvement. I’m very tired of being on airplanes, let's be clear, but those moments sitting with a customer workshopping ideas are fantastic. Natasha, what's top of your mind today?

Natasha: I started visiting clients and have a couple of conferences coming up, which will be great to see procurement friends and talk transformation. I actually read a very interesting article yesterday. UPS and Amazon are wrapping up or significantly reducing their partnership. While Amazon is UPS's largest customer, it's the less profitable one. It was interesting to see a company forfeit revenue to focus on higher profitability. Amazon has grown its own supply chain and logistics team significantly, simplifying things like returns through the acquisition of Whole Foods. It reminded me of when Amex and Costco ended their 16-year relationship; it shook the business world because of the co-dependency. It's good to see the business world doesn't stay stagnant.

Zachary: It’s so interesting because we always talk about SRM (Supplier Relationship Management), but we never talk about when relationships change after ten years. Maybe UPS got too reliant, or Amazon built its own service. We never talk about that moment when you're not on the same wavelength and you have to "divorce" your partners. I just thought that was interesting.

Conrad: I saw in the news that Amazon now has airplanes. I see their trucks everywhere, but when that relationship started, UPS was a giant compared to them. Now Amazon is a rival to any logistics organization on the planet.

Natasha: It’s just unfortunate that the side effect is usually layoffs. UPS announced a 30,000-job cut, which is significant. Speaking of layoffs, for our listeners, we had an amazing episode with Lucien Alziari a couple of weeks ago. He’s a well-regarded CHRO who has coached 25 other CHROs. We talked about the commercial impact of layoffs and if they really make sense. Take a listen to that episode. But let's talk about today's topic.

Conrad: I missed being with you and Lucien, but I listened to it and it was amazing. The leadership insights were fantastic. We’ll have to make him a recurring visitor.

Natasha: I met him through World 50 where we were facilitators for the Next Leader program. We talked about intentional leadership. Lucien is amazing in his delivery of everything related to leadership and talent.

Conrad: Well, Natasha, why don't you lead us into the conversation today around Supplier Relationship Management (SRM)?

Natasha: Yes. Every organization depends on third parties. Over the years, the perception procurement professionals have about suppliers and the types of relationships we build has changed. I’ve been on the buyer side for 25 years and on the supplier side for the last two. It’s interesting to see the different mentality. I’d like to kick off with us sharing perspectives: do you see that the role of suppliers and enterprise expectations has changed?

Conrad: It’s hard to talk about suppliers as a big blob. You have to look at the critical strategic suppliers. I’ve sensed a desire to shift from cost savings to value, and you can’t have value conversations without the relationship. However, I think most people are still just treating them like utilities. It’s really hard to implement effective SRM.

Zachary: I think it’s really hard. In all my years of consulting, I haven't personally seen a leading-edge SRM program that delivered what we always tell ourselves it's supposed to. I see it mostly in IT functions because they like to manage their vendors, but there is still scope for more. For me, the biggest thing is that SRM needs the whole business; procurement can't do it by itself.

Natasha: Procurement shouldn't do it by itself. There is often confusion that SRM is procurement's business. It's procurement's job to create the framework, but it's the enterprise's responsibility. Marketing should be interested in evaluating agencies; supply chain should be interested in carriers. Procurement can help frame it so we know if a supplier is in good financial standing, performing to the spirit of the contract, or bringing innovation. Why do you think this area has progressed so little in 20 years?

Natasha: I agree with Zach; I didn't see many well-established SRMs. Success was hit or miss when I tried to establish them. Answering my own question: why was it difficult? We couldn't get attention from other enterprise leaders because they didn't see the value.

Zachary: I have a gut feeling it comes down to people. You can have the best process, but it needs to be relationship-driven. People at the top of both companies need to work together and cascade that down. You also need a cultural fit. That's when real strategic value comes in.

Conrad: How much of this is like people management? I have an opinion that really good people management isn't much better than really good supplier management. Managers often don't set clear expectations or provide support, then are surprised when a superstar turns mediocre. I see the behavior as very aligned. Why are people not investing in these development items to move relationships forward?

Natasha: I see it slightly differently. With talented employees, I subscribe to "hire the smartest and step away". With suppliers, it's difficult because navigating large, cumbersome enterprises is extremely complex. Suppliers need help navigating the enterprise, so you can't just step away.

Conrad: I’m going to hold my point. If we bring Zach onto our team, I still expect to set clear expectations. If they are super ambiguous, it's not going to work. I see suppliers asking for that same clarity. Vision and goals are universal facilitators of success at both the people and supplier levels.

Natasha: I disagree yet again, Conrad, because if I come with too many clear expectations and "do this, this, and this," I'm cutting their opportunity for creativity and not tapping into their vision or what they've learned from other customers. For critical suppliers, you should brainstorm the solution together. You tell them the end goal, but you arrive at the "how" together.

Conrad: I think we're more aligned than that felt. Micromanaging fails. I love the collaborative arrival at goals. But if you don't get practical about where we are versus where we said we'd be six months ago, you don't move. That’s a lack of leadership.

Zachary: Regarding segmentation: teams often have multiple criteria like spend, risk, or commercial relevance. Often "tier one" just means high operational risk, but that isn't always where innovation comes from. You need multiple strategies. You have your compliance/risk strategy, and then you have your innovation strategy, which might involve very small suppliers with little spend. Don't have the same agenda for all of them.

Natasha: To be fair, you can have $10 billion on the direct side with 400 suppliers, and $10 billion on indirect with 25,000 suppliers.

Conrad: At Intel, the direct material teams were significantly staffed. A whole team might manage silicon wafer suppliers because it's so critical. They understand the market and pricing deeply.

Zachary: Yeah, but typically those are people like engineers, not procurement.

Conrad: But we can learn from those best practices. Academically, we could sit at a whiteboard and write down the ideal template for any business. What's the difference between writing it down and actually implementing it?

Natasha: You go to the enterprise with the framework, but the enterprise still operates on "what's in it for me?". Why do we think a structured program is necessary? Is it a box to check, or a necessity?

Zachary: Most companies stand to benefit from lower costs, better experience, and innovation. For me, the most important thing is alignment on incentives. What’s in it for the supplier to bring their best ideas to you first? There has to be a win-win. You need to create the program with the supplier.

Natasha: Otherwise, it becomes "useless theater". If you don't have buy-in from the organization, you have to keep educating them on why risk or cost management is important. Advanced marketing organizations might even fight procurement for ownership of QBRs. I say "hallelujah"—take it. Procurement should just create the applicable framework.

Conrad: We're not doing a good job convincing the business that we can help them. Sometimes we bite off more than we can execute. This is hard; you have to start small to build it into the DNA.

Zachary: That’s great practical advice. Don't start with 20 suppliers; start with one or two and try to get it right.

Conrad: You can segment, but your segmentation will tell you there are a thousand suppliers and you can't manage them all. You need granular segmentation based on which business stakeholders are ready to partner.

Zachary: Maybe procurement's role isn't setting up programs, but creating a platform for SRM to take place and marketing it internally. If you build it, they will come.

Conrad: I don't think it's that easy. In the factory, if tires don't show up, the cars don't go out—people care. In other organizations, we are often setting up programs that fit our strategy rather than asking the head of marketing who their most critical supplier is. Also, as AI takes over administrative tasks, relationship management is the future of your job. Start learning it now.

Natasha: When should procurement step out and let the business and suppliers co-create?

Zachary: It's an operating model question. You can facilitate everything, or have a center-led model where you equip stakeholders with the tools to do it themselves.

Conrad: We can't do everything. Go where you can add the most value, build success stories, and sell those stories.

Zachary: Practical insight: do stakeholder mapping before supplier segmentation so you know who will partner with you.

Natasha: What are the practical steps organizations can take tomorrow to transition to strategic SRM?

Zachary: Start with a conversation, not a spreadsheet. Do stakeholder mapping. Ensure you have the authority to align incentives.

Natasha: Don't be overly attached to "owning" it; be an enabler. Sell your vision and customize why each function benefits.

Conrad: Start simple. Find a stakeholder you can build a relationship with, figure out what matters most to their business, pick one or two suppliers, and prove it out for 6-12 months. Then the rest will come.

Natasha: If I’m looking at 20,000 suppliers, how do I dissect that into digestible bites?

Conrad: The initial spreadsheets are easy. Get the spend data and sit down with a stakeholder. They'll likely be shocked by how many suppliers they actually have. Then ask what is most important to their business—focus on the top three. If you aren't a data person, find someone who is.

Natasha: I’m not a data person. At Nike and other companies, I had people who did that. I understand what I need from data to make decisions, but I partner with "data gods" like Riley who can translate numbers into solutions.

Conrad: In the world of AI, the stakes for good data just went up 10x. Data is my "person of the year". Underlying everything we do is data.

Natasha: Every leader has something to contribute. I'm the least technologically advanced person in the room, but I educated myself through hundreds of demos to match client needs with solutions. It was out of my comfort zone, but that's why we have teams.

Zachary: For segmentation: don't make it a science. Sit down with people who understand the business. Use spend, but also define criticality carefully. Score "reverse materiality"—how important are you to the supplier? Score the cultural fit. Don't overcomplicate it.

Natasha: Great summary. Thank you all for joining us for this discussion on SRM. If you hit a block, call us.

Conrad: We'd love to help. Don't forget to like, follow, and share.

Zachary: Thank you, everyone.

Natasha: SRM rocks

This transcript has been edited for clarity while maintaining all substantive content