Supplier Relationship Management Software — Everything You Should Know

Supplier relationship management software is a very important factor for procurement managers to strengthen their relationship with their suppliers. However, what is this supplier relationship management software?

For this piece, we are going to talk about supplier relationship management. We will discuss the benefits of using SRM tools or software applications and the factors you should consider when selecting what’s best for your organization. Additionally, we will show you some of the best supplier relationship management software applications or tools available in the market.

After reading this article, you should have a good idea of the different software you can utilize in your business. This will allow you to streamline and build a stronger connection with your supplier.

Supplier Relationship Management Explained

Supplier relationships are very important to every organization. You cannot get favorable contract terms for the goods and services you want to acquire if you do not have an amicable working relationship with your suppliers.

Supplier relationship management (SRM) is an approach companies use to assess the suppliers that supply their goods, materials, and services. It determines each supplier’s contribution to the company’s success and creates new strategies to improve their performance.

The SRM helps companies determine the value each supplier provides and which is the most critical for business continuity and performance. Additionally, it allows managers to build better relationships with suppliers based on the importance of each supplier.

SRM is usually used by many supply chain professionals who constantly deal with suppliers in areas such as procurement, project management, and operations.

What is Supplier Relationship Management Software?

Many organizations use supplier relationship management software to organize supplier information and maximize supplier benefits and value. The solution or software is a part of a supplier relationship management system that enables monitoring and traceability of all external sales and procurement across your entire organization.

Additionally, it helps companies to streamline supplier selection, supplier onboarding, supplier performance assessment, supplier document management, and other important supplier-related processes.

The SRM aims to ensure buying from reliable suppliers, bring end-to-end visibility of supplier collaboration workflow, and improve the resilience of the supply chain.

The SRM software centralizes supplier-related data, supports contract and procurement management, automates supplier scoring, and provides a supplier portal as a medium for communication with different suppliers.

Significance and Benefits of SRM Software

Supplier relationship management software is an important tool as it gives companies a medium to create better communication with suppliers and provides crucial information to stakeholders. Thus, enabling them to make smarter decisions regarding procurement strategies.

Supplier relationship management software allows companies and procurement managers to manage their workflows and automate processes for better supplier management. Additionally, the software may allow add-on solutions for third-party applications or integration with existing network systems.

Many companies benefit from the software as it offers improved visibility into the supply chain and enables cost traceability for enhanced budget management.

The software helps you gain instant access to the information that you need in order to make changes to improve budget spending, address supplier issues, and track supplier performance. Thus, ensuring that the suppliers are meeting the requirements of the company.

Having SRM software allows you to develop stronger supplier relationships and negotiate better contract terms with your suppliers.

Factors to Consider in Choosing a Supplier Relationship Management (SRM) Tool

We understand that selecting the right Supplier Relationship Management (SRM) tool can be challenging with so many options available. But don’t worry, we’re here to assist you by highlighting the important factors to consider when choosing an SRM tool that suits your needs! Here are some key points to keep in mind:

1. Assess the skills of your employees 

As your business begins to experience the benefits of SRM software, it’s important to equip your team with the necessary skills to make the most of your supplier relationships. Training your personnel in the use of SRM software not only optimizes your processes but also enhances collaboration with your suppliers.

To succeed in SRM, there are two main skill sets your team should develop: business competencies and functional competencies. These skills will enable them to effectively navigate the SRM process and achieve positive outcomes.

When considering the ideal traits for these roles, it’s helpful to find a balance among different characteristics:

• Flexibility: Embracing change and being adaptable are valuable qualities when working with SRM software.
• Structure and Consistency: Being able to work in an organized and systematic manner ensures smooth operations.
• Teamwork and Communication: Strong collaboration skills and effective communication foster healthy supplier relationships.
• Relationship Building: Cultivating meaningful connections with suppliers is key to successful SRM.
• Analytical Abilities: Having the ability to analyze data and make informed decisions contributes to improved supplier management.

While these qualities can be developed through training, it’s important to consider individuals who already possess some of these inherent traits. If necessary, you may even consider recruiting new team members who align with the desired profile.

Remember, training your personnel to understand and manage the SRM process is just one part of the equation. Equipping them with detailed knowledge of the SRM software tool is equally important to ensure they can utilize its functionalities effectively.

2. Check if it is easy to use

It’s important to choose a supplier relationship management (SRM) technology that is user-friendly and intuitive for the people managing relationships. The technology shouldn’t aim to do all the work for them but rather empower them to be more strategic by handling tactical processes.

Just like how account managers rely on CRM systems in their daily work, an SRM leader should embrace SRM technology as a valuable tool for nurturing supplier relationships. By ensuring the technology is easy to use, it becomes a trusted ally in your journey to build strong and successful partnerships.

3. Determine if it can be integrated with other software 

SRM software needs to play well with others! When choosing a tool, you want something that can easily connect with your existing enterprise tools and systems. After all, you’ve already invested time and resources into setting up your tech infrastructure, and it would be a hassle to start from scratch.

That’s why compatibility is key. Imagine having all your supplier data scattered across different platforms and applications. It would be a nightmare to navigate through multiple systems just to get a holistic view of your supplier relationships.

That’s where well-integrated SRM software comes in. It centralizes all your supplier information into one comprehensive picture, making it easy for you to access and analyze crucial data whenever you need it. By choosing an SRM tool that connects easily with existing systems and embraces new developments, you ensure that your business stays agile and well-equipped to navigate the ever-changing landscape of supplier management.

4. Check if suppliers can collaborate with you 

Collaboration is the name of the game in supplier relationship management! When it comes to SRM software, it’s essential that suppliers can easily log in and collaborate with your organization. Imagine having a one-stop hub where everyone involved in the supplier relationship can collaborate in real time.

Suppliers can provide updates, share important documents, and have direct conversations within the software itself. This means no more hunting for scattered data or worrying about outdated versions. Everything is organized and accessible, bringing transparency and smooth communication to the forefront. By embracing SRM software that fosters supplier collaboration, you’re creating a true partnership. It’s all about breaking down barriers, enhancing efficiency, and building stronger relationships with your suppliers.

The Best SRM Software Today

Below are some of the best Supplier Relationship Management software available in the market today:

1. SAP Business One

SAP Business One is a single and affordable business solution to manage your business, especially small businesses. It integrates departmental information into a single software platform for you to manage procurement and purchasing tasks. 

Although it has business-wide applications, SAP Business One offers purchasing functions such as quotation requests, approvals, and good receipt purchase order updates.

2. GEP Smart

GEP Smart is a complete procurement solution with full spend analysis, sourcing, contract management, supplier management, purchasing, invoice handling, and saving track processes integrated into it. 

It is a unified procurement platform that helps companies in driving efficiency for direct and indirect procurement designed to automate all source-to-pay processes.

3. Ivalua

Ivalua is a complete procurement platform that provides a unified source-to-pay solution to digitize all processes, manage all spend categories, and enhance transparency and data quality.

It provides supplier relationship management tools that are designed to make the source-to-pay workflow easy. It has supplier management features such as request management, sourcing and contract management, and supplier master data management.

4. Pipefy

Pipefy is a business process automation solution utilized for supplier management in addition to creating and optimizing purchasing and procurement processes. The platform centralizes important process information like supplier databases and contracts. 

Pipefy enables full visibility of supplier information for better supplier communications, faster approvals, and measurable department spending with customizable dashboards.

5. ProcureWare

ProcureWare is an e-procurement system that offers sourcing, contract management, and supplier management functionalities. It enables companies to perform improved online bidding tasks, contract administration, reporting, risk management, and document management.

Additionally, ProcureWare offers visibility and collaboration in supplier management for businesses. It can also be utilized by both small and large companies to meet requirements for materials, services, and construction.

Conclusion

Supplier Relationship Management (SRM) software plays a pivotal role in optimizing supplier interactions, streamlining processes, and improving overall procurement efficiency. The adoption of a suitable SRM tool empowers organizations to make informed decisions, enhance communication with suppliers, and build robust, long-lasting relationships.