Supplier Relationship Management Software

by Michael Koploy
ERP Analyst, Software Advice
May 9, 2012

What Is Supplier Relationship Management (SRM) Software?

A contract between a supplier and its customer goes through many stages through its life-cycle. In order to remain competitive, organizations have to take special care in maintaining efficient and cost-effective partnerships with their partners. The only way to be certain that suppliers are holding up their end of the bargain is to consistently evaluate their performance, a difficult task made easier by SRM software. SRM systems help users keep suppliers on their toes by monitoring their operations and revealing poor performance.

Features & Functionality

Like customer relationship management (CRM) software, SRM is designed to manage relationships from initial contact and throughout ongoing purchasing cycles. However, since you’re managing supplier information, rather than customer information, the data has markedly different focus, including material databases, ratings and more.

Specific SRM features include:

Recent News

• SAP. The newest version of SAP’s supplier management software is SRM 7.02 (Enhancement Pack 2, or EHP2). Updates include: workflow adjustments, such as allowing the user to create RFPs directly from the shopping cart or procurement modules; the addition of “unkown” as a category assignment in SRM; an improved interface within the sourcing module; a greater emphasis on sustainable procurement within the strategic sourcing module (e.g. sustainability parameters during product selection), and; deeper integration between the SAP SRM and SAP ERP products.
• Decideware. One of Decidware’s most recent updates has been to the Scope of Work module of its supplier management program. The update included: more customizable workflows; improvement of its contract and statement of work features; new advanced reporting and benchmarking tools, and; better analytics for managing out-of-pocket expenses. Additionally, Decideware was named a Cool Vendor in Marketing by Gartner in April (2012)--a second such award from Gartner, after recently being named a Cool Vendor in Procurement and Finance.
• Hiperos. Like Decideware, Hiperos was named a “Cool Vendor” by Gartner in the area of Risk Management in 2011. Aetna, the health benefits provider and a Hiperos client, recently received a “Best Use of Technology” award from the Procurement Leaders Network in April, 2012. By using Hiperos’ technology solutions, Aetna was able to effectively manage compliance scorecards and ensure its partners maintained compliance and sustainability requirements.

Evaluating Supplier Relationship Management Software

Global economic trends have had a direct affect on the SRM software market. Over the last few years, more organizations have turned to SRM software to establish new ways to reduce spending and limit risk. In order to maximize supplier performance and get the most out of their spending, organizations are using SRM systems to build informed reports that will give them the advantage during contract evaluation and renegotiation. Meanwhile, the necessity of international relationships has stretched supply chains across the world, and many SRM vendors have improved the functionality of their system to keep up with this trend.

Risk management has to be more thorough than ever. By assisting users with escalation scenarios and other risk analyses, SRM systems will help users deal with the unforeseen problems of global trade. When selecting your SRM software, ask the following questions:

• Is your organization looking for an on-premise, client/server deployment, or are you interested in the capabilities offered by web-based or cloud deployments?
• Will the system allow you to compare supplier performances using your own set of weighted variables?
• Does the system offer the necessary functionality to meet the unique needs of your organization? For example, can it monitor supplier compliance for the specific regulations that your industry deals with?
• Will the system’s capabilities support your existing corporate frameworks for managing supplier relationships?

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