Five Rules: To Shortlist Supplier Performance Management Vendors (Supplier Relations‪)‬

Supplier management is widely recognized as a strategic enabler. In today's world of complex business environments and global supply chains, the effective management of suppliers not only provides a competitive advantage but also has a direct impact on the organization's bottom line. Such criticality of supplier management makes it important for organizations to constantly evaluate supplier performance, assess risk and find opportunities for improvement in the value chain. The price-based evaluation of suppliers has long become outdated. Today, organizations need 360[degrees] supplier evaluation on multiple parameters. Supplier evaluation isn't just limited to procurement; it also involves the evaluation of multiple internal functions. Such requirements have led organizations to formulate complex key performance indicators (KPIs) and supplier performance scorecards, requiring inputs on multiple parameters from different internal stakeholders. Up until recently, supplier performance management (SPM) was manual or based on rudimentary information technology tools that, at best, could be described as ad hoc, cumbersome and time consuming. These evaluation processes were also plagued by a lack of visibility and the absence of collaborative platform and process efficiency. Thankfully, information technology is rapidly changing the way organizations evaluate supplier performance. The best of breed SPM solutions available today are widely being recognized by organizations as an important enabler to manage, monitor and find opportunities to collaborate with suppliers. The usually cumbersome, time consuming and opaque processes are now getting a facelift with efficient and simplistic SPM solutions. However, the SPM market is largely fragmented and with the availability of a number of solutions to choose from, organizations need to carefully select a solution that can address their specific requirement in line with the overall objective of supplier management. Here are the few rules that organizations should keep in mind when shortlisting an SPM solution.