5 Advantages With Supplier Relationship Management Software

Supplier Relationship Management (SRM) can be complex.

Supplier Relationship Management software can make things a little bit easier.

Sales and marketing teams have reaped the benefits of Customer Relationship Management (CRM) solutions and Marketing Automation for the past 15–20 years. All the while, procurement and sourcing teams have been left to fend for themselves, and forge their own way forward, with homegrown solutions; often using a mix of Microsoft tools to address supplier management needs.

Homegrown solutions can take you far in life, but the future of procurement excellence is reliant upon a transformation of procurement strategy, process, people and — of course — technology. Better work tools = better work. SRM software provides a means to work interconnected, smarter, faster and future-proof your procurement organization.

Here are 5 advantages you will gain by adopting Supplier Relationship Management software.

5 Advantages of Adopting an SRM System

1. Safeguard Brand Value

SRM software can help keep your doorstep clean and your brand value intact!

Many modern Supplier Relationship Management software (Including Kodiak Hub) provide a means to better monitor, spot and address supplier-related risks.

Like Kodiak Hub, many of today’s SRM software solutions include risk and compliance management and DD capabilities/functionality. Kodiak’s solution, in particular, leverages 3rd-party risk intelligence to supplement a user’s market intelligence surrounding supplier geopolitical, social/environmental, financial risks and adverse media/media exposure. Parallel to this, our solution offers the ability to streamline supplier governance and due diligence activities to cover increasing demands on compliance and supply chain visibility.

Lack of compliance among suppliers can cause loss of brand value which in return may cause significant loss of shareholder and equity value. Studied cases at Kodiak show between 1–3 % loss of brand exposure to a non-compliant supply chain. By using SRM software, and basing sourcing decisions on a wider scope of sourcing criteria, the risk of supply chain oversight is significantly reduced.

2. Increased Negotiation Power

Suppliers are friends, not food.

At the same time, your role as a procurement professional will always contain a strong focus on negotiation with suppliers and the creation of cost savings.

Adoption of Supplier Relationship Management software can provide a better means of visibility and control of your supplier relationships. Therefore SRM software can strengthen your ability to negotiate responsibly and with confidence.

By having full insight into the supplier's mode of operating and contract compliance, (cross-referencing output performance with agreed-upon KPIs/levels of delivery) negotiations become more effective and data-driven. We’ve seen teams that adopt SRM software can experience 3–5% of cost savings on total spend.

3. Trust & Control

As pointed out in advantage number 2, Supplier Relationship Management software gives you control over your suppliers.

SRM is a nuanced discipline as it requires a fine balance between control and trust from buyer and supplier. Alike.

SRM Platforms offer a better means for communication, collaboration and sharing information, which can enhance buyer-supplier transparency and ensure a more open, trust-filled and honest business relationship.

Our team members at Kodiak are strong believers that control and trust are byproducts of better data management. The more you can see and manage, the more at ease you and your team will be. Simply breaking out of the confines of your supplier spreadsheets and SharePoint will provide you with Supplier Information Management support tools that make it

• Easy to gather supplier data
• Easy to access information/documentation
• Easy to collaborate within
• Easy to integrate with existing business solutions

Visibility is necessary to gain control over supplier risk, compliance, performance, contracts and spend.

See the image below of Kodiak Hub’s Supplier Scorecards where users have supplier ratings, data, notes, comms and documentation all visualized in one place.

SRM software can provide you with the increased visibility you need to feel like you’re in the driver’s seat. Read more on how SRM Software streamlines operations here

4. Full-Time Equivalent (FTE) Savings

Companies can experience time savings estimated at 12–20% of FTE for a strategic buyer, category manager or supplier responsible when SRM technology is applied on manual and admin tasks.

Supplier Relationship Management can entail its fair share of busywork.

Process support such as automation of tasks, reminders and pre-defined templates saves time and resources on ‘busy work’. By reducing such time-consuming and — potentially — boring tasks from procurement team members, the focus may be placed on problem-solving, analysis, preventive and development-focused actions. Such as locating mutual savings, increasing production efficiency and/or supply chain consolidation efforts.

5. Enhanced Supplier Experience

Do you really think that your suppliers like receiving lengthy excel questionnaires and attachments during onboarding?

This question is rhetorical.

If your SRM strategy plans to put your buyer-supplier relationships under the lens, then it’s important to address both parties' experience of the collaboration. SRM software offers a means to address the Supplier User Experience, which is equally as important as a Buyer’s User Experience. If a supplier perceives a customer as one that’s easy to work with, then chances are high that they will engage more in the collaboration. SRM software offers ease of use to suppliers, which will be directly associated with your organization.

As a procurement organization your success often depends on the willingness of a supplier to collaborate, report and lean in.

SRM software can help your organization remove the barriers standing in the way of supplier engagement and enablement.

Read more on How a Supplier Management System Can Improve your Procurement Team & Business.