Why Do You Need SRM Software? The Pain Points Explained!

Written by: 
Bernd Neufert

Expert in strategic procurement

May 7, 2024
5 min Read


Managing supplier relationships effectively is more crucial than ever. However, this task is often riddled with Problems that can impede operational efficiency and strain departmental interactions. In this article we discuss the specific pain points our customers face without effective Supplier Relationship Management software and illustrate how a good SRM system, like relatico, can provide robust solutions to these issues.

Understanding the Pain Points in Supplier Relationship Management

Technical Complexity and Legal Challenges

SRM is inherently technical, often encompassing a myriad of legal considerations that can overwhelm those without specialized knowledge. Businesses frequently struggle with the legal intricacies related to compliance, contracts, and quality standards, which can lead to costly mistakes or oversight. This is more important than ever due to the German LKSG and the European CSDDD.

Organizational Complexity

The complexity of regulatory requirements can necessitate the reorganization of procurement processes (PTP processes), adding layers of difficulty in standard operations. This often results in inefficiencies and a lack of clarity in procurement activities.

Time-Consuming and Labor-Intensive

The administration of supplier relationships involves extensive documentation, compliance checks, and coordination across departments, making it a time-consuming endeavor. The mundane yet critical tasks of managing documents and ensuring compliance often divert attention and energy of good employees from core purchasing responsibilities.

High Costs with No Direct Financial Return

Investing in SRM activities typically incurs significant costs related to labor and software tools. Moreover, many businesses perceive that these expenditures do not directly contribute to an increase in sales or immediate financial benefits, making it a less attractive investment despite its importance.

Lack of Expertise

Often, the responsibility of managing supplier relationships falls on procurement leaders who might lack the specific expertise required to navigate the SRM landscape effectively. This can lead to inadequate handling of regulatory challenges and suboptimal supplier interactions.

Inadequate Documentation and Quality Control

Determining the necessary documentation and managing its procurement and approval can be a chaotic process. Lack of standardization in document formats and poor communication can result in incomplete or incorrect submissions, further complicating compliance and quality checks.

Departmental Silos and Friction

The segmentation of tasks across various departments without a coordinated approach leads to isolated operations. This not only slows down processes but also fosters an environment ripe for conflict and frustration, detracting from the overall productivity and morale of the organization.

How SRM Software Addresses These Pain Points

Streamlined Processes and Centralized Data Management

SRM software like relatico simplifies the management of supplier information and documentation by centralizing data in a single, easily accessible location. This helps in reducing the time spent on document management and enhances the efficiency of procurement processes.

Enhanced Compliance and Quality Control

With built-in tools for compliance management and quality assurance, SRM software ensures that all supplier interactions meet regulatory standards and company policies, significantly reducing the risks associated with non-compliance.

Improved Interdepartmental Collaboration

SRM systems facilitate smoother communication and collaboration between departments. By providing a shared platform for information exchange, these systems help in aligning goals and strategies across the organization, thus minimizing conflicts and enhancing teamwork.

Cost Efficiency and Value Creation

While SRM software requires an initial investment, the long-term savings from improved efficiencies and reduced errors provide substantial financial benefits. Moreover, strategic supplier management can lead to better negotiation outcomes, cost savings, and ultimately, a stronger bottom line.

Empowered Decision-Making

With comprehensive analytics and reporting capabilities, SRM software provides valuable insights into supplier performance and market dynamics. This empowers procurement leaders to make informed decisions that align with the strategic goals of the organization.

Conclusion: The Relatico Advantage

In the face of these SRM challenges, relatico emerges as a powerful solution that not only addresses the typical pain points but also enhances operational capabilities through innovative features like sustainable sourcing and double materiality analysis. By leveraging relatico for your SRM needs, you can transform cumbersome regulatory necessities into strategic advantages, fostering a more efficient, collaborative, and proactive procurement environment.

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Bernd Neufert
Expert in strategic procurement

We're happy to help!

I would be happy to learn about your challenges and show you how our software solutions can help you.

Bernd possesses extensive experience in strategic procurement, shaped by his tenure at Eckes-Granini, Symrise and DuPont de Nemours. Currently, he is focused on sustainable sourcing and supply chains, collaborating with the relatico team to develop practical software solutions. Additionally, Bernd runs his own agricultural business and is involved in supply chain projects globally.