Supplier Relationship Management Software
Features, Benefits, Costs
ScienceSoft applies 10-year experience in building supply chain management software and practical knowledge of 30+ industries to help companies implement effective SRM solutions.
SRM Software: The Essence
Supplier relationship management (SRM) software implementation powers companies with a comprehensive set of automated analytical and tracking tools that help streamline supplier selection and onboarding, supplier performance monitoring and assessment, and other important supplier-related processes.
SRM solutions centralize supplier-related data, eliminate manual efforts across supplier pre-qualification and scoring, support contract and procurement management, and provide a supplier portal for facilitated communication with multi-tier suppliers.
When integrated with HR management software, SRM software can cover the functionality of a vendor management system for staffing needs to help businesses that rely on external workforce streamline hiring processes and management of relationships with contingent workers, service contractors, and freelancers.
Key Features of an SRM System
ScienceSoft creates SRM software with unique functionality closely bound to our clients’ objectives. Here, we share a set of features commonly requested by our customers:
Supplier data management
- Registration of suppliers and sub-suppliers by sourcing specialists or self-registration via the supplier portal.
- Storage and tracking of all supplier data (supplier interaction history and ongoing activities, current capacity and pricing, general information about the companies).
- Document storage (contracts with suppliers, invoices, certifications proving supplier compliance with the business requirements, etc.).
- Search engine with filtering and metadata querying to navigate supplier data and documents.
- Automated linking of related data records (e.g., all records related to a particular supplier can be accessed in a supplier profile).
- Personal/bulk notifications about updates in supplier data or sourcing & procurement activities to involved specialists.
Bidding and supplier selection
- Setup of supplier compliance requirements (quality standards, capacity, sustainability, delivery terms, etc.).
- AI-based supplier pre-qualification (to assess their financial stability, regulatory compliance, risk of supply disruptions, etc.).
- Quick form-based creation of sourcing events (e-tenders, e-auctions).
- Automated sourcing event approval workflow.
- Sourcing event status tracking (for sourcing specialists and suppliers).
- Template-based supplier invitations for participation in bidding.
- Supplier bids comparison (that may include compliance scoring for a particular sourcing event and analysis of cost benefits).
- Collaboration with department managers on supplier selection and nomination.
- Quick form-based creation of purchase requisitions, RFxs, and purchase orders.
- Automated approval workflow for purchase requisitions and purchase orders.
- Supplier assignment to purchase orders with analytics-based recommendations on fitting suppliers.
- Creation and management of preferred supplier lists (e.g., suppliers for particular products/services assigned by procurement specialists drawing on analytical insights).
- Status tracking for purchase requisitions and purchase orders.
- Automated three-way matching (purchase orders, order receipts, and supplier invoices are cross-compared to reveal inconsistencies if any).
- Order execution tracking (for several tiers if required).
- Communication tools to discuss orders with the suppliers.
Supplier risk management
- Real-time supplier risk monitoring (reputational, financial, operational, and other risks assessed by AI based on private and public data sources + data from the questionnaires filled in by the suppliers).
- Ongoing supplier compliance checks.
- Automatic risk alerts on any risk exposure.
- Pre-defined workflows for supplier issue mitigation, e.g., issue analysis, resolution suggestion, resolution review, and approval.
- Risk exposure dashboard (with an overview of overall risk exposure level / per risk factors / per particular suppliers or supplier groups).
Supplier performance management
- Supplier performance analytics.
- Automatic alerts on deteriorating supplier performance.
- Supplier comparison and segmentation (based on supplier performance and the level of engagement).
- Configurable dashboards with a supplier activity overview.
Supplier contract management
- Template-based creation of contracts for supply.
- Automated contract approval workflow (collecting internal and supplier approvals).
- Contract status tracking.
- Alerts for contract start/renewal dates.
- Contract versioning.
SRM database administration
- Audit trail (to track who and when adds or changes any transactions in SRM software, e.g., places purchase orders).
- Data backup and recovery.
Supplier portal
- Personal supplier dashboard with all related activities: assigned purchase orders, available e-tenders & e-auctions, contract reviews, etc. (available for authorized suppliers).
- Automatic alerts for suppliers to update expiring data (accreditations, certifications).
- Supplier catalog updating and editing.
- Supplier forum with Q&A sections and shared file spaces (featuring R&D results, demand forecasts, etc.).
- Instant messaging tools (for sourcing and procurement specialists to communicate with suppliers’ and sub-suppliers’ representatives).
- Creation of template-based and custom supplier surveys and their individual or bulk sharing (e.g., to get supplier feedback on collaboration).
Security and compliance
- Multi-factor user authentication.
- Permission-based access for various user groups, including purchasing managers, sourcing managers, category managers, procurement analysts.
- Intelligent fraud detection.
- Compliance with SOX, SOC 1 and SOC 2, WTO regulations, FAR (for federal government procurement in the US), Peppol (for eProcurement in the EU), other relevant region- and industry-specific regulations.
Explore the Workflows in a Sample SRM System by ScienceSoft
Implementation of SRM Software with ScienceSoft
In supply chain management software development since 2012, ScienceSoft helps companies build reliable and cost-effective SRM solutions to make better sourcing and purchasing decisions, mitigate supplier performance and compliance risks and streamline communication with suppliers.
Selected SRM projects by ScienceSoft
Supply Chain E-Collaboration Network for 1,700-Store Retailer
- Real-time monitoring of supplier performance.
- Template-based creation of purchase orders, emails to suppliers, and more.
- Trackable communication with suppliers via a vendor portal.
- Role-based access control for category managers, store managers, suppliers, accountants, etc.
Customer’s benefit: Improved supplier collaboration, facilitated supplier communication, enhanced visibility into supplier performance.
Airlines Contract and Tender Management Software
- Creating and managing fuel purchase tenders.
- Automated upload of fuel market prices, rates for en-route charges and exchange rates from relevant third-party sources.
- Centralized storage for supplier contracts.
- Exporting supplier contracts from one airport to other airports when required.
Customer’s benefit: Extended software functionality, streamlined contract and tender management.
ServiceNow® Application for Supplier Performance Analysis
- Comprehensive supplier performance analysis and reporting.
- Calculating the supplier failure cost.
- Alerting the employees involved in SRM activities on spend by a particular supplier exceeding the pre-set threshold.
Customer’s benefit: Shorter time-to-market for the ServiceNow application, advanced supplier performance analytics and reduced supplier-associated costs for end users.
ScienceSoft’s services
SRM software consulting
- Analysis of your supplier relationship management needs.
- Assessment of the existing SRM processes, tools and their integration points (if any).
- Suggesting optimal features, tech stack and architecture for the SRM solution.
- Preparing an integration plan with ERP, WMS, inventory software, etc.
- Implementation cost & time estimates, expected ROI calculation.
SRM software implementation
- SRM needs analysis.
- SRM solution conceptualization.
- Architecture design for a SRM system.
- SRM software development.
- Integrating the solution with other business-critical systems (ERP, WMS, inventory software, etc.).
- Quality assurance.
- User training.
- SRM software maintenance and adaptation.
- Continuous support and evolution (if required).
Important Integrations for SRM Software
ScienceSoft recommends integrating SRM software with relevant corporate solutions to build a resilient supply chain and eliminate double data entry across disparate systems. Essential integrations include:
- SRM software + ERP: to transfer accurate supplier data and analytics (on supplier performance and risks) from SRM to ERP to leverage it at all levels of enterprise planning (operational and business planning).
- SRM software + intranet: to collaborate with business departments on supplier selection and procurement activities (e.g., other departments can submit their specific sourcing requirements and participate in the supplier approval process).
- SRM software + warehouse management software (WMS): to transfer notifications on received supplies (with the results of their quality inspection) from WMS to the involved users in SRM.
- SRM software + inventory management software: to transfer data on inventory levels from inventory management software to SRM for timely procurement.
Factors That Determine SRM Software Success
In SRM projects, ScienceSoft always seeks to cover the following important factors that may bring the customer additional value across SRM processes:
High level of automation
across daily routines of employees engaged in sourcing & procurement activities to increase their productivity and free them up for high-value, strategic SRM tasks.
High visibility into all levels of SRM processes
from supplier onboarding and pre-qualification to strategic sourcing and purchasing activities.
Advanced supplier performance analytics
to accurately assess supplier risks and enable informed SRM-related decisions based on AI recommendations, e.g., on optimal bid evaluation criteria or optimal supplier selection scenarios.
Powerful search engine
to quickly find supplier information and supplier performance stats on a particular supplier, business unit or region and easily navigate documents (contracts, invoices, etc.).
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ScienceSoft’s Business Analyst and Digital Supply Chain Consultant Sergey Legchekov shares his experience: To benefit from fast and efficient supplier onboarding, facilitated supplier communication, and robust automation across procurement activities and document exchange, you need to encourage maximized adoption of a supplier portal among suppliers. Make sure your supplier portal provides intuitive UX and convenient UI to guarantee effective supplier engagement with a portal and drive high portal adoption rate. |
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Implementation Costs and Financial Outcomes of SRM Software
The cost, duration and approach to SRM software implementation vary greatly depending on:
- The number and complexity of a solution’s functional modules, including the degree of automation (implementation of RPA and AI-powered features).
- The volume of data that needs to be migrated from the spreadsheets and/or existing SRM software.
- The number and complexity of integrations (with ERP, WMS, inventory management software, etc.).
- Data storage type (a centralized database or a private blockchain).
- Required application types – web, mobile, desktop – and a number of platforms supported (for mobile).
- SRM software availability, performance, security, latent capacity and scalability requirements.
Based on ScienceSoft's experience in SRM software implementation, a custom SRM system of average complexity requires $200,000 – $400,000 in investments. The implementation of such a solution takes 7 – 13 months.
Detailed timelines for each stage of SRM implementation
A typical ScienceSoft's project on SRM system implementation covers the following stages and timelines:
- SRM requirements engineering & design: 4 weeks.
- Project planning: 1 – 2 weeks.
- SRM software development: 4 – 6 months.
- SRM software integration with other systems: 1 – 12 weeks.
- SRM software deployment and testing: 1 – 2 months.
- User training: 2 – 4 weeks.
- After-launch support, maintenance, and evolution: continuous.
HIDE
With SRM software, you can reach up to 260% annual ROI.
Microsoft Dynamics 365 Supply Chain Management: Procurement & Sourcing Module
Best for
End-to-end procurement and sourcing for small and mid-sized companies.
Description
- 360-degree overview of all supplier information.
- Configurable setup of sourcing and purchasing workflows (e.g. supplier approval workflow for specific products/services.
- RFQ supplier bids scoring and comparison.
- Easy traceability of supplier-related documents (purchase requisitions, expense reports, etc.).
- Seamless integration with Microsoft Power BI for self-service supplier analytics (to generate data-rich reports on dashboards related to collaboration with the suppliers).
Cautions
Complicated and costly customization to cover business-specific SRM needs and smoothly integrate with legacy corporate systems.
Oracle Supply Chain Management: Procurement
Best for
Procurement for small and mid-sized companies.
Description
- Supplier qualification management (with automated supplier scoring) and compliance monitoring.
- Automated purchase requisition approval workflow and status tracking + automated creating of purchase orders from approved requisitions.
- Supplier portal for simplified communication with suppliers.
- Authoring of supply contracts: templates, clause libraries, built-in collaboration tools to draft compliant contracts.
- Seamless integration with Oracle Financial Cloud to manage financial transactions.
Cautions
Costly subscription ($400 per user/month), which makes the solution economically unfeasible for businesses with large teams involved in SRM processes.
SAP Ariba: Supplier Management
Best for
Supplier management and development for mid- and large-sized companies.
Description
- Automated supplier onboarding and qualification process.
- Supplier segmentation and performance management (with the help of scorecards, questionnaires filled out by the suppliers and KPIs monitoring).
- Matrix-based supplier reports and analysis (based on category, location, and business unit).
- Real-time risk exposure monitoring (reputational, compliance, financial, sustainability, and operational risks).
- Self-service for suppliers to manage their own information.
- Seamless integration with SAP Procurement, Strategic Sourcing, Buying, Spend Management.
Cautions
Substantial customization efforts to meet unique SRM needs. Supplier sourcing, procurement management and spend management require add-on modules, which drives solution cost.
Enterprise Cloud SRM Software
Best for
All aspects of supplier relationship management for large enterprises with complex IT infrastructure.
Description
- A custom-made feature set to address business-specific needs.
- Advanced capabilities that off-the-shelf products do not provide, e.g., custom calculations of supplier ratings or bid compliance scores, comprehensive AI-based analytics on supplier risks, intelligent spend forecasting.
- Flexibility to easily employ new functionality or advanced techs when required.
- Smooth and cost-effective integration with back-office systems (ERP, WMS, etc.), including legacy software.
- Ensured compliance with required global, country- and industry-specific regulations.
- AI-powered fraud detection to guarantee security of SRM solution and data it stores.
- Support for a centralized database or blockchain-based data storage.
Cautions
Requires collaboration at the requirements engineering and project planning stages.
About ScienceSoft
ScienceSoft is an international IT consulting and software development company headquartered in McKinney, Texas. We provide consulting and development services to help businesses build effective SRM solutions tailored to their unique vendor relationship management needs. Being an ISO 9001 and ISO 27001 certified company, we rely on a mature quality management system and guarantee cooperation with us does not pose any risks to our customers' data security. Check ScienceSoft’s offering on software consulting to learn more about our approach.