Typically, this key information is not standardised, and a summarised report on the data, is next to impossible. What is essential is an information system that quantifies and manages supplier relationships. An effective SRM system will lead to the development of procurement strategies that reduce costs, make procurement predictable and sustainable, enhance supplier partnership relationships and, will create leverage in supplier contract negotiations. The key benefit of SRM is the direct impact it will make on an organisation's bottom line. The SAS Institute coined the term 'supplier relationship management' and has developed the SRM concept into a methodology that implements an analytical approach to strategic sourcing within an organisation.
Organisations generally spend a substantial portion of their revenues purchasing goods and services.
Reducing this spend will directly impact on the bottom line. And impacting on the bottom line is what SRM is all about. It is the process of thoroughly understanding your supplier base by consolidating and classifying all your critical purchasing data, and then capitalising on this knowledge by implementing profitable supplier strategies. Streamlining In short, SRM will enable your organisation to streamline its procurement practices. No matter what you buy, the SAS Solution for SRM will contribute to cost savings - between 5 and 15 per cent of your total spend, depending on your organisation's size.