This is a sponsored post by Kodiak Hub
Supplier Relationship Management (SRM) can be complex.
Supplier relationship management software can make things a little bit easier.
Sales & Marketing teams have reaped the benefits of Customer Relationship Management (CRM) solutions & 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. These often use 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. This means 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 Key Advantages from using Supplier Relationship Management Software
1. Safeguard Brand Value
SRM software can help keep your doorstep clean, and your brand value intact!
It provides a means to better monitor, spot, and address supplier-related risks.
Many of today’s SRM software solutions include risk management, compliance management, and due diligence capabilities/functionality.
Some solutions, like Kodiak Hub, leverage 3rd-party risk intelligence to supplement a user’s market intelligence of supplier geopolitical risk, social/environmental risk, financial risk, and adverse media/media exposure. Parallel to this, they offer 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. This may cause significant loss of shareholder and equity value. Studied cases at Kodiak Hub show between 1–3 % loss of brand exposure resulting from 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.
- Increased Negotiation Power
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 operating model, as well as contract compliance, negotiations become more effective and data-driven. For example, through cross-referencing output performance with agreed-upon KPIs/levels of delivery. We’ve seen that teams that adopt SRM software can experience 3–5% of cost savings on their total Spend.
- 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 & trust from buyer and supplier alike.
SRM platforms offer a better means for communication, collaboration, and sharing information. This can enhance buyer-supplier transparency and ensure a more open, trust-filled, and honest business relationship.
Control & 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 break out of the confines of managing your suppliers using spreadsheets and SharePoint. This 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.
SRM software can provide you with the increased visibility you need to feel like you’re in the driver’s seat.
- 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 to 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. Examples of this could be collaborating on mutual cost savings, increasing production efficiency, and/or supply chain consolidation efforts.
- Enhanced Supplier Experience
Do you really think that your suppliers like receiving lengthy Excel questionnaires and email attachments during onboarding?
This question is rhetorical.
Your SRM strategy plans to put your buyer-supplier relationships under the lens. So, 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 they will engage more in the collaboration. SRM software offers ease of use to suppliers, which will be directly acknowledged by them.
As a procurement organization, your success often depends on the willingness of a supplier to collaborate, report, and lean in. Check out: 5 Ways to Spark Supplier Engagement: Making Vendors Into Partners
SRM software can help your organization remove the barriers standing in the way of supplier engagement & enablement.
Kodiak Hub Supplier Relationship Management (SRM) platform is your engine for building sustainable supplier relationships. The journey towards smart strategic sourcing starts with Kodiak Hub.