Welcome to part 2 of the series on the key capabilities needed to be an effective Supplier Relationship Manager. Knowing what capabilities are required is what will help you become superior when managing suppliers and vendors, transparently and collaboratively.

Preface

The purpose of having a Supplier Relationship Manager in place is to ensure that your IT and Procurement Department has the ability to gain oversight and effective management of all your key supplier and vendor relationships. This includes; having the ability to implement rigorous controls to manage operational risk, obtain the best value for money from strongly negotiated contracts, and improve delivery efficiencies from your vendors through transparent and collaborative working.

An effective supplier relationship manager will require being able to manage a portfolio of IT suppliers and contracts that they own dependant on your business’s strategic aims.

There is always going to be a strong element of service lifecycle management within the role if you were to base your management around an efficient software solution. Supplier relationship managers would need to have an appreciation and working knowledge of the Information Technology Infrastructure Library (- a guide containing best practices in set modules on the IT Infrastructure needed to easily sustain and develop an effective set of technological processes.) Across the series is the 5 key areas which are key in establishing the maximum value and ability to sustain a role as a Supplier Relationship Manager, both in running a team of SRM members and on being an individual owning a set of suppliers or vendors.

2. Contract Management

Contract Management requires you to work closely with both sourcing and procurement bodies within the organisation, to ensure that contractual agreements have been developed and established with the related vendors. This includes looking closely at the following areas during the contract lifecycle:

Firstly it is key to ensure that across the procurement office, due diligence is being accurately measured. This includes ensuring this due diligence is being matched on a consistent basis by comparing your allocated vendor portfolio to the relevant requirements expected at service level.

Your SRM function also must have sufficient processes in place to enable them to monitor the performance, operational risk and financial stability of their vendors, whilst allowing them to also take further action if necessary through communication between both parties. This will ensure that your organisation are able to amend or discuss current contractual agreements for the benefit of both parties in the near future, and especially if operational risks were to rise considerably.

Your management team also needs adequate management information to ensure there is full visibility of the rest of the supplier relationship management team, and their performance against their owned vendor portfolio. The use of the correct procurement contractual vehicles and frameworks, in this case, will help to drive that transparency and get a 360-degree coverage of the SRM team needed to effectively manage your vendors.

It is also essential that the SRM team leader has the ability to provide best practice advice to other SRM functions within their department, as well as internal stakeholders. This includes assisting these stakeholders in obtaining high-quality requirements prior to any procurement activity within the organisation.

As well as this, to effectively obtain the full visibility mentioned earlier, and run primary best practice, it is always good for the SRM leader to coordinate contract and supplier management controls across the organisation. This includes maintenance of a schedule of contract dates which are re-segregated across the Supplier Relationship Management Team, and other relevant contract or supplier data so that everyone has full visibility of the short term strategic outcome of each vendor they own.

And finally, if you are considered as the main source of your SRM function, it is always extensively productive to gather, analyse and interpret local and national market intelligence obtained from future, present or past vendors related to the industry you run in. This may include:

• Initiating and leading market intelligence activities, undertaking market development.
• Organising and facilitating awareness events between vendor relations.
• Production of supplier analysis reports.

This is the second of 5 blogs focused on the necessary skills of an effective supplier relationship manager. Be sure to look out for part 3 of this series, looking at the skills focused around Service Delivery Support.