Best Practices for Building an SRM Program
Procurement teams with robust supplier management systems are partnering with their suppliers to achieve key business goals like supplier diversity, strategic cost savings, and more spend under management. How can you build out your program and set it up for success?
Involve key stakeholders early: Even the best SRM program means nothing if stakeholders aren’t engaged. Make sure to involve key partners early in the process to understand their needs for an SRM program. Working with stakeholders early can also help you determine which categories to score performance against and identify mandatory supplier information like Sarbanes-Oxley compliance, historical financial information, and more. Lastly, involving business stakeholders early gives you a chance to create process evangelists who can help spread awareness of the new program and drive business engagement.
Centralize supplier data: It’s essential to gather a base layer of data before building out your program. For many companies, supplier data can be stored in a variety of locations, including separate databases, email chains, desktops, or even desk drawers. By aggregating your existing data, you can gain a more holistic understanding of your existing supplier process and identify gaps.
- Prepare internal and external training: Effective change management can make all the difference in ensuring a new process is adopted by both stakeholders and suppliers. Successful SRM rollouts often involve multiple training sessions to help educate your partners on how to use the new program and how it benefits them. As an added bonus, these training sessions can help you strengthen relationships with other business units by increasing engagement and spreading awareness of procurement.
Building an SRM program from scratch can be intimidating, no doubt. In one case, a leading financial services company had to reverse-engineer its SRM program using existing slide decks containing supplier performance data.
But, as the company scaled, it was able to centralize and automate this data, leading to better visibility across the organization as well as actionable insights into supplier relationships. In other words, with the proper preparation and proactive engagement with the business, you can create an effective strategy that strengthens relationships and drives performance.
Interested in learning practical tips for creating an SRM program from scratch? Check out this Guide to Supplier Management and explore the seven steps you can take to ramp up your SRM.