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SRM; a CRM mirror for purchasing
Innovation for company growth usually occurs at department or management level and then is mirrored in another. This system of crossover in tools and practices can be seen in the world of supplier relations. Sales and marketing departments are being led using the solutions tailored to customer relations.
The SRM (Supplier Relationship Management) is the mirror of CRM (Customer Relationship Management) which appeared in the 1990s in call centers. How data is managed and utilized is now at the heart of an in-depth supplier relationship that is beneficial in improving company performance and where SRM is the essential tool. Jaime Lopez, Pre-Sales Consultant at SynerTrade, sheds light on this subject.
1. Birth and evolution of CRM
In the 1990s, with the development of call centers, the first solutions dedicated to customer relations appeared. By storing and organizing customer data, it was now possible to offer a higher quality of service, establish an optimal relationship and thus increase sales and achieve business objectives.
Since then, these solutions have continued to evolve, empowered by the growth of Internet technologies and marketing evolutions. Since the early 2000s, with the emergence of SaaS-based solutions, CRM (Customer Relationship Management) has emerged: Now the solutions interconnect with the other IT tools present in the company for an ever-richer customer relationship and thanks to increasingly more in-depth data. With globalization and the economic crisis, CRM solutions have focused strongly on customer loyalty rather than conquest: customer knowledge allows us to propose offers and services in the spirit of maximum personalization.
The expansion of these solutions into the business has also resulted in new user experience practices: developing solutions that even an untrained user can take on.
2. From CRM to SRM: Transforming the Sales and Purchasing Relationship
We have just seen that the connection between the different services was facilitated by knowledge management solutions and that company performance was measured with sources other than new customer acquisition. This has been the case for many years. Sales are no longer the only way for the company to earn points: it is estimated that to earn a point of profit, it is necessary to invest 25 points in the sales force, while on the purchasing side, a cost point earned sees itself back immediately. Purchasing have seen their position change in the company to take on a strategic role.
Nowadays, procurement projects involve all the company's management from product design to sales planning and forecasting. SRM is therefore an invaluable tool that not only manages purchasing data but also interconnects with other management tools in the company, including CRM. Company’s understood the value of these tools to help both the procurement department and the Board. Whilst the two had little cooperation in the past, sales management and purchasing departments are now working in synergy. SRM is an essential channel of this new relationship.
3. Purchasing Management revolution through SRM
Albert Einstein said, "Insanity is doing the same thing over and over and expecting different results". Transposing the process of increasing sales into procurement improvement processes is a good example of how SRM has taken on its full dimension in procurement. We are at the same time in a mirror effect, but without the pitfalls that the sales personnel would have had in the past. In procurement, the processes have largely evolved thanks to the SRM.
Today, the digitization of purchases is based on tools that have the same functionality as CRM. It is a question of knowing the suppliers, of being able to optimize and follow all the stages of the relationship by eliminating as much risk as possible to the suppliers, and to facilitate the loyalty of the latter. Far from strict practices of contract and price management, it is a matter of establishing a relationship of constant and transparent collaboration and innovation with evaluation tools. The supplier becomes a partner and this quality of relationship benefits the company through the purchasing department. SRM also frees buyers from repetitive and low value-added tasks such as administrative or document delivery. They can therefore devote themselves to tasks with high added value to their goals. Recent innovations always aim for a simplified user experience and adapt to new uses, such as mobility or predictive functions.
4. Tomorrow's digital procurement tools: an even stronger link with the finance department
Recognizing the importance of having interconnected purchasing and finance departments, SynerTrade teams constantly evolve their solutions according to changes in business practices. New features and modules will go in this direction and will be made available.
• Tools dedicated to the compliance of payment terms
• Integration of P2P (Procure to Pay)
• Design to Cost: collaborative design tools
• Integration of Lean Purchasing functionalities for operational excellence in procurement
• Audit applications for buyers who are dependent on the criterion of "savings achieved"
• Integration of artificial intelligence to automate certain tasks
• Social Learning: using social networks as a supplier information source
Peter Drucker, Austrian philosopher, said that “Long-range planning does not deal with the future decisions, but with the future of present decisions". A thought that suits perfectly to describe the spirit with which we work to the evolution of our solutions. SRM is constantly evolving, driven by changes in the purchasing business, by Internet-based technologies and the need to improve the company's performance at all levels of its organization. Digital Procurement solution publishers are on the front line to see the continuous and profound changes that constantly transform the role and mission of purchasing departments. It is knowledge of these business processes and purchasing processes that underpins the dynamic of our own progress.
About the author
Jaime Lopez, pre-sales consultant at Synertrade