Risk control is main goal of SRM tools, says survey

Will Green is news editor of Supply Management
15 September 2014

The main goal of a supplier relationship management (SRM) tool is to control risk, according to a survey.

In a report called SRM: The Backbone of Procurement Process Efficiency, Ivalua said three quarter of respondents considered risk management to be the main reason for deploying an SRM tool, followed closely by process standardisation.

The survey, which included 283 responses from Europe and North America, found that in Europe 50 per cent of respondents said procurement alone was in charge of maintaining the SRM system, compared with 80 per cent in North America.

At the same time 42 per cent of European participants said they managed their SRM system in partnership with the accounts department, compared with 9 per cent in North America.

The report said this was due to “the greater maturity of America procurement departments”, which have “ceased almost entirely to rely on databases supplied by their accounting departments”, as opposed to SRM systems in European firms that are still “in the construction and deployment phase”.

The survey found the biggest barriers to deploying an SRM tool were “rationalising the procurement categories”, followed by “aligning company and procurement strategies”.

“The challenge is to create a consistent architecture between the SRM system and other internal information sources, to ensure that the supplier data shared at group level is reliable, up-to-date and confidential,” said the report.

Gérard Dahan, general manager EMEA at Ivalua, said: “This new survey shows that efficient management of supplier information enhances purchasing department performance in a number of ways. At the operational level, it decreases the workload for purchasers, while it improves decision-making and risk control at the strategic level.”

 

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