Here's what we'll cover:
What Is Supplier Relationship Management (SRM) Software?
Common Features of SRM Software
Evaluating SRM Software
A contract between a supplier and its customer goes through many stages through its lifecycle. 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.
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. Users looking for a system with more robust features might be interested in vendor management systems.
Specific SRM features include:
| Performance assessments | SRM programs will allow the user to utilize key performance indicators (KPI) to perform quality assessments and a thorough awareness of deviations. |
| Risk assessments | Scorecards enable supplier segmentation by user-defined risk variables, helping determine which partners present the least risk in the most important areas. |
| Centralized sourcing & collaboration | SRMs use a centralized information database to streamline bidding, consolidate and distribute contracts, track compliance and improve collaboration. |
| Regulation compliance | High-quality SRMs use rules engines and compliance scorecards to reduce the burden and improve the success of compliance protocols. |
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.
The process of evaluating and mitigating risk 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:
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