Supplier Relationship Management (SRM)

Welcome to the Proactis Supplier Relationship Management Content Hub, your one-stop resource centre to automate SRM processes
 

Supplier Relationship Management (SRM)?

Supplier Relationship Management (SRM), sometimes referred to as Vendor Management ,is the process of managing all types of supplier contracts, and associated purchases, to drive maximum value from every supplier contract.1 Purchase and delivery activity are automatically collected for analysis of supplier performance and buyer commitments, and contract dates and other criteria are continually monitored, alerting the appropriate people when reviews or actions are needed.

Good suppliers are an important asset to any organisation2 since they provide the goods and services that facilitate what an organisation does. Each supplier therefore represents a relationship which needs to be nurtured, as well as an element of risk which needs to be managed.3
 
 

Supplier Relationship Management can have many challenges:

  • Supplier on-boarding is time consuming for both parties.
  • Supplier qualification is often too subjective, providing little visibility of risks.
  • Consistent measurement and evaluation of supplier performance is difficult, often resulting in ‘best guess’.
  • Keeping suppliers’ profiles and catalogues up to date is an enormous task.4 It would be easier for both parties if the supplier could do the updates themselves, but providing access is often a security problem.
  • Accounts Payable personnel spend too much time answering supplier questions about invoices and payments.

A quick guide to improve supplier engagement and reap the rewards

This guide provides the key factors that you need to consider:
  • The situation
  • The challenges
  • What is required
  • The steps needed to succeed
​Improve supplier engagement and reap the rewards today.
Find out how
A quick guide to improve supplier engagement and reap the rewards

Supplier Relationship Management solutions can provide:

Improved supplier performance and lower costs.
Improved supplier performance and lower costs.


Reduced cost of disruptions caused by supplier non-performance.
Reduced cost of disruptions caused by non-performance.


Reduced cost of administration support in Accounts Payable and Procurement.
Reduced cost of administration support in Accounts Payable and Procurement.


All supplier information up to date and transparent
All supplier information up to date and transparent, so you can share supplier data across your organisation.

National Trust achieves £30 million savings as part of its procurement strategy transformation

"Our suppliers love the system as it gives them control of their records and information. Our internal staff also love it. We have gone from an average of two weeks to onboard a new supplier, to, on occasion less than an hour. Our record is six minutes!"

Learn more
See how Supplier Relationship Management helped the National Trust
With Proactis you can build and maintain a strong supplier base by structuring and streamlining the entire supplier lifecycle – from initial identification to adoption, approval, transaction and analysis.

It helps manage the whole process, reducing supplier risk and improving supplier relationships while dramatically reducing administrative effort. You can bring together all information about your suppliers in one central location, with all data available across the organisation.

Learn more about Proactis SRM
SRM FAQs
What is Supplier Relationship Management?
Supplier Relationship Management (SRM) is the process of maintaining, and improving, your supplier base by structuring and streamlining the entire supplier lifecycle – from initial supplier identification to adoption, approval, transaction and analysis. Suppliers can be constantly appraised for how appropriate they are to supply to your organization. The result is visible, risks are identified and the process is auditable. Communications such as checking payment details or account information, changing contact details and updating catalogs are all done online.
How does a vendor management system work?
A well-structured SRM solution supports efficient, consistent supplier recruiting, qualification, on-boarding, and performance appraisal. It does this by making it easy to build and maintain a comprehensive supplier directory and manage the supplier lifecycle by providing web-based tools to support supplier recruiting, qualification, adoption and appraisal. It also simplifies supplier information management and communications by providing a supplier network for self-service maintenance of company information and catalogs, as well as self-service account enquiries.
What are the challenges that Supplier Relationship Management can solve?
  • Supplier on-boarding is time consuming for both parties.
  • Supplier qualification is often subjective, providing little visibility of risks.
  • Consistent measurement and evaluation of supplier performance is difficult.
  • Keeping suppliers’ profiles and catalogues up to date is an enormous task.
  • Accounts Payable personnel spend too much time answering supplier questions about invoices and payments.
How does vendor management play a role in procurement?
Procurement teams can build and maintain a comprehensive supplier directory to manage the supplier lifecycle. You can bring together all information about your suppliers in one central location, with all data available across the organisation. All supplier information is available in one click, and you can be sure that the information is up-to-date. Supplier performance and risk can be monitored using relevant information from different applications, meaning that you can keep track of vendor performance levels. 
How do I automate vendor risk management?
Supplier Relationship Management systems help remove manual processes from supplier appraisals, selection and on-boarding to ongoing evaluation. Suppliers can also be given self-service tools so that they can keep their own information up-to-date and accurate. Read how the University of Sussex has automated it's processes.
 
Why is vendor risk management important?
Supplier risk management is just as critical to your organisation’s financial health and competitive performance as your efforts to produce cost savings. High-risk suppliers need to be constantly appraised for appropriateness to supply to your organisation. The result needs to be visible, risks identified and auditable. The negative impact of a single event on your organisation’s financial position or reputation is potentially huge, even devastating.

Read: Minimise supplier risk.
What are the steps in supplier process management?
Supplier relationship management encompasses:
  • Identifying and selecting the best suppliers.
  • Measuring and improving supplier performance.
  • Collaborating seamlessly with suppliers.
  • Improving supplier quality.
  • Identifying supplier risk. 
Read: Supplier risk management: More than a one-time or periodic event
Glossary
Spend Control
The aim of all organisations, to control what is being purchased and to optimise spend and supply chains so they can reach their full potential. Spend control helps to save money and create efficiencies while increasing compliance and reducing risk.

Source-to-Pay (S2P)
A complete end-to-end outsourcing solution, usually made up of component parts - Source-to-Contract (S2C) or Procure-to-Pay (P2P).

Source-to-Contract (S2C)
Part of the end-to-end spend management process that supports the Procurement team in the activities they perform to make qualified suppliers and negotiated best-value agreements available to the organisation for use when they need to buy something.

Procure-to-Pay (P2P)
Also known as Purchase-to-Pay, this is the part of an end-to-end procurement system that enables and manages the routine purchasing of goods and services by an organisation’s staff.

Spend Visibility
The ability for managers to easily access past in process, and potential (request submitted but not yet approved) spend within their realm of responsibility.

Spend Under Management
The portion of spend that is influenced by the Procurement team and their processes.


Procurement / eProcurement
eProcurement and all of its various component terms such as eSourcing, eAuctions, eInvoices, ePayables, etc. are all terms that simply imply the use of information technology and internet-based communications to support the Spend Control process – including all procurement and financial control aspects of that process.

Supply Chain
In its simplest form, a supply chain is the activities required to deliver goods or services to the consumer. When thinking about a service, services will come together to offer an overall customer service, as opposed to a finished product.

Supply Chain Management
Supply chain management is the process of managing the flow of goods and services to and from a business, including every step involved in turning raw components into final services/products and getting them to the customer.

Purchasing
The acquisition of goods and services on behalf of a buying entity.

eInvoice
Broadly speaking, an electronic invoice is any invoice sent by a supplier to the buyer in electronic form rather than as a paper invoice.


Contract Management
Contract management in procurement is the process of managing agreements with suppliers to achieve the best possible financial and operational performance. The goal is to ensure compliance, mitigate risks, and optimise supplier relationships.

Marketplace
Sometimes referred to as an eMarketplace, a procurement marketplace is a platform that connects staff with approved suppliers and contract when they are purchasing products and services.

Accounts Payable Automation
An efficient and effective Accounts Payable function supports an organisation’s cashflow and helps build healthy supplier relationships. The process of capturing all incoming invoices and efficiently transform them into optimised eInvoices, and enabling efficient invoice matching/approval in their finance system.



1 5 Rules for Successful Supplier Relationship Management Oxford College Of Procurement & Supply Retrieved 2025-02-04.
2 Supplier relationship management Wikipedia Retrieved 2025-02-04.
3 A complete guide to supplier relationship management Indeed Career Development Blog Retrieved 2025-02-04.
4 What is Supplier Relationship Management in Procurement? Art Of Procurement Blog Retrieved 2025-02-04.