What to Consider When Buying an SRM Software?
Supplier Relationship Management (SRM) techniques are strategic developments in businesses that are focused on optimising and effectively managing the connections between third-party companies that supply goods and services to the business. The purpose is to systemise the interactions with these suppliers and optimise supplier delivery performance, quality performance, compliance and any details related to the relationship between the business and the supplier.
To ease and structure the implementation of these techniques, many companies use an SRM software that allows them to control these interactions with suppliers to keep a historical scorecard on each supplier and to be able to share the information instantly among specialized personnel in the company and with suppliers. Moreover, an SRM tool also presents a set of attractive advantages that any business would consider useful.
Some benefits of SRM software can be seen below:
- Allows to develop continuous improvement project in the supply chain.
- Speeds up problem solving times when there are problems in supplier deliveries.
- Standardizes supplier performance tracking and measurement.
- Evaluates the overall performance of the vendor, which enables constructive business relationship discussions.
- Automatically systemises every operational process that is included in the supplier management process. This increases efficiency.
Traditional SRM strategies are based on reactive suppliers management where focus is dealing with firefighting and negative situations at any stage of the supply process, this affects the relationships between companies. However, by implementing an SRM solution, you will get ahead of every possible negative situation by completely understanding your relationship with your vendor and planning ahead to avoid ‘fires’ before they start. This saves time, energy and money.
It is important that the company establishes some basic criteria at the time when selecting a SRM solution. Here we will take a look at some of the important factors to take into account and discuss crucial details that must be considered before purchasing an SRM software.
Let’s begin with the most essential one of them.
3 Factors to Consider When Buying an SRM Software
Factor #1: Is your personnel prepared to execute the SRM process?
As your business realizes the benefits of SRM software, there arises a need to train your personnel in the software in order to optimize your relationship with your suppliers. The skills required to work in an SRM process can be divided into two main groups: business competencies and functional competencies.
When evaluating the personality profile for these tasks, the personnel need to have a balance between the following characteristics:
- Flexible to change.
- Ability to work structured and consistently.
- Team work and communication abilities.
- Relationship building competencies.
- Analytic competencies.
Despite that these personality profiles can be improved with training, there must be an intrinsic ability in the person that will perform the work. This means that the business may need to recruit someone if no one in your team can match the profile.
After training your personnel to deeply understand and manage an SRM process, you must also make sure that your personnel also get detailed knowledge in the handling of the SRM software tool.
Factor #2: Is the SRM software easy to use and implement?
Another important factor is related to the implementation of the SRM software within the company. Will it be easy and seamless to implement? Will it be easy to use for users and suppliers? Will it be easy to share information within the company? Will the stakeholders and vendors be able to provide feedback easily? Are you able to visualize and manage multiple suppliers’ relationships and performance in one and the same solution? These are some of the questions that you must ask yourself when considering if an SRM software will be easy to implement or not.
The possibility to share and easily organize documents, meeting minutes and contracts must be available and must also have a user-friendly interface that makes it easy and pleasant to visualize and read the information. Keeping track of issues and problems within the supply chain is also very important and the SRM software must provide an option to track these issues and make it easier for vendors and the team to notify any issues in deliveries. Real-time problem solving is essential as it optimizes time and money for both the supplier and the company.
These features will make the interaction between organizations much more profitable. You must also measure if the SRM has suitable and simple implementation procedures for your suppliers as well. A too complicated process will simply discourage suppliers to continue using the software effectively.
Factor #3: Do you have access to a complete 360° dashboard with suppliers' performance?
The possibility to track and visualize indicators that allow you to evaluate the performance of every supplier across the entire business is essential to decide which suppliers are beneficial in the long term and which are not. By having a summarized dashboard with relevant information such as supplier’s delivery times, quality standards, prices, compliance scores and any other data that you consider important, you will be able to measure and score every supplier on a consistent and fact-based basis. Your SRM software must have this functionality.
You should also be able to decide whether or not to show this information to your suppliers. After all, transparency is essential in every relationship and that also includes the relationship with your suppliers. The best thing about a great SRM software is that your supplier won’t have to read disorganized emails and excel sheets every time you want to share your KPIs on suppliers with suppliers. Everything should be synchronized, shared and clearly explained via the SRM solution.
The SRM Solution
One of the best things about implementing an SRM solution into your business is that your supplier managers will be able to effectively manage the suppliers proactively in a much more organized, optimal and easy-going way.
This will definitely bring more benefits to your company and will save your procurement team many troubles and time in the long term. Leave behind your old-style procurement procedures that only react when a problem arises and opt for an SRM solution that will jump ahead as the most effective planning tool for your business.