Supplier relationship management has been dealt with inside of spreadsheets, sharepoint, notes and emails. But no more. It’s time more Procurement Teams invested in Supplier Relationship Management Software to gain the real benefits lying in your supplier data.
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 companies far, 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 to future-proof the procurement organisation.
HERE ARE 5 ADVANTAGES COMPANIES WILL GAIN BY ADOPTING SUPPLIER RELATIONSHIP MANAGEMENT SOFTWARE:
1. Safeguard Brand Value
SRM software can help keep the doorstep clean and 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 Due Diligence 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, Kodiak Hub’s 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
At the same time, the 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 supplier relationships. Therefore SRM software can strengthen the 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. Kodiak Hub has 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 control over a company’s supplier base.
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.
Kodiak’s team members are strong believers that control and trust are byproducts of better data management. The more people can see and manage, the more at ease the team will be. Simply breaking out of the confines of regular supplier spreadsheets and SharePoint will provide companies 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 organisations with increased visibility which makes them feel like they’re in the driver’s seat.
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 companies really think that their suppliers like receiving lengthy excel questionnaires and attachments during onboarding?
This question is rhetorical.
If their SRM strategy plans to put the 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 the organisation.
As a procurement organisation, success often depends on the willingness of a supplier to collaborate, report and lean in.
SRM software can help organisations remove the barriers standing in the way of supplier engagement and enablement.