9 ROIs of Adopting an SRM System

Still unsure about the ROI of adopting a Supplier Relationship Management platform? Discover the wide range of benefits and value that Procurement can deliver to their organization with powerful SRM solutions and stronger supplier relationships.

Are you interested in adopting a dedicated SRM system but unsure of the value that it will deliver? In this blog, we’re diving into the ROIs that an SRM platform can bring to your organization by driving stronger supplier relationships, operational excellence, and strategic top-line value.

With the new challenges and opportunities that Procurement faces, strong Supplier Relationship Management has become more crucial than ever. Yet too many teams are still trying to manage their suppliers via ERPs, legacy solutions, or emails and spreadsheets – which are inefficient and not designed to empower world-class SRM.

In our recent whitepaper in collaboration with ProcureTech, our research found that only 28% of Procurement teams use a dedicated SRM system to manage their suppliers.

SRM technology breakdown

Since dedicated SRM systems are relatively new to the industry, these numbers are understandable. But nevertheless, not enough Procurement organizations are harnessing their full potential by adopting innovative solutions to manage their supplier relationships – either due to a lack of knowledge about the full value of an SRM system or the difficulty of building a business case to justify the investment.

At Kodiak Hub, we know the full value that strong Supplier Relationship Management can deliver and have designed our innovative solutions to empower Procurement teams to harness that value. With new SRM technologies like Kodiak Hub, you can accelerate your SRM journey, transcending the mere operational and tactical management of suppliers to drive strategic transformation that unlocks value throughout the entire supplier lifecycle and value chain.

But what are the tangible benefits of adding an SRM system to your tech stack?
The answer is: there’s no shortage.

To help you and your organization understand the immense value that’s waiting for you to unlock within your supplier relationships, let’s dive into the 9 biggest ROIs of adopting a dedicated SRM system.

1. Efficiency & Time Savings

Strong Supplier Relationship Management is no easy task. With hundreds or thousands of suppliers and an overwhelming amount of data to manage, most Procurement teams lack the time and resources to progress beyond the most rudimentary aspects of SRM.

But with an end-to-end SRM system, you can automate manual tasks and streamline processes to save time and drive efficiency in a multitude of ways:

  • Data Consolidation – Say goodbye to scattered data siloes and hunting down supplier information across spreadsheets, emails, and legacy solutions. An SRM system consolidates all of your supplier data and documents, keeping all the information you need at your fingertips.

  • A Single Source of Truth – With all of your supplier data centralized, your team and stakeholders can stay aligned, enhance collaboration, and make faster, smarter sourcing decisions.

  • Streamlined Supplier Onboarding – Take the tediousness out of your supplier onboarding with streamlined SRM solutions that reduce onboarding times by up to 80%, allowing you to focus on forging stronger relationships with your suppliers and driving strategic value.

  • Automated Processes – From effortlessly integrating Big Data into your system to streamlining workflows with automated solutions, an SRM system transforms your team’s work from manual to magnificent and drives efficiency throughout all of your Procurement processes.

  • Data-Driven Insights – With centralized data and automated solutions, an end-to-end SRM system delivers powerful 360° insights throughout the entire supplier lifecycle that would be impossible to unlock with legacy solutions.

With all of the time savings and improved efficiency that an SRM system will bring your team, now let’s move on to the rest of the opportunities that you’ll have the time and resources to unlock together with your suppliers.

2. Risk Mitigation

With the new challenges that Procurement faces, mitigating risk and building resilience has never been more crucial. With new regulations, supply shortages, and global supply chain disruptions, businesses must be more vigilant than ever with their supplier risk management across an ever-increasing range of areas.

SRM systems empower Procurement teams to not only effortlessly and accurately monitor supplier risk, but also leverage 360° insights across a wide range of risk areas including:             

  • Macro & Country Risk – Measure the contextual risks based on your supplier’s location, such as Human Rights, Labor Rights, Environmental Performance, Business Ethics & Anti-Corruption, Political Stability & Rule of Law, Tradeability, and Economic Stability.

  • Financial Risk – Automatically generate detailed assessments of a supplier’s financial health, including Credit Score, Probability of Default, Credit Limit, Profitability Score, Solvency Score, Liquidity Score, and an overall financial rating.

  • Reputational Risk – Protect your brand with automated supplier screenings of blacklists, sanctions, and PEPs, as well as ongoing global media monitoring to be first to know anytime your suppliers make the news and stay ahead of any adverse media about your supplier base.

  • Supply Chain Risk – Mitigate disruptions to your supply chain with alerts on global climate and disaster events to be able to act fast and avoid supply chain failures.

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With the massive impact that contemporary risks can make on your business’s operations and brand, adopting an SRM system with 360° risk monitoring can prevent 1-3% market cap loss in the short term, while also delivering immeasurable long-term ROI by preventing major disruptions to your supply chain and protecting stakeholder value.

3. Compliance Management

As businesses face a tsunami of new ESG legislation, Procurement teams are now faced with the complex challenge of ensuring compliance with regulations throughout their entire supply chain. Besides being extremely time consuming, Procurement teams must protect their organizations from reputational damage and huge penalties for failing to comply – such as fines of up to 5% of global net turnover for CSDDD violations.

But a smart SRM system removes the headaches and complexity of supplier compliance management – with streamlined supplier assessments, document management, data centralization, automated notifications, and powerful reporting tools.

When it comes to supply chain due diligence and responsible sourcing, modern SRM systems are a must for any Procurement team to ensure compliance throughout their supply chain and future-proof their business.

4. Cost Savings

Organizations rely on their Procurement to reduce costs. But there so many opportunities for cost savings that are only possible with a powerful SRM platform.

  • Reduced Procurement Costs – We’ve already mentioned the improve efficiency and time savings that SRM systems deliver – which, of course, provides significant savings on Procurement costs. With time savings, aligned processes, and task automation, teams can achieve up to 15-20% FTE savings by adopting an SRM system.

  • Negotiation Leverage – With detailed insights into supplier performance and market conditions, Procurement teams can negotiate better terms, prices, and discounts across their entire supplier base. With stronger negotiation power, Procurement can lower their TCO and achieve savings of up to 3-5% of total spend.

  • Inventory Optimization – Improved supplier collaboration ensures better demand forecasting and inventory management, reducing holding costs and mitigating the risks of stockouts or overstocking.

Beyond empowering Procurement to solve new challenges and drive top-line value, Supplier Relationship Management solutions enable teams to excel at their core responsibility and deliver improved cost savings like never before.

5. Supplier Performance

As the famous Peter Drucker quote goes: “If you can’t measure it, you can’t manage it.”

Unfortunately, many Procurement teams relying on legacy solutions for their SRM never have the time or resources to effectively measure supplier performance – let alone manage it.

In today’s increasingly competitive and risky landscape, the performance of suppliers can make or break a business. High performing suppliers can ensure operational efficiency and facilitate top-line value generation through improved collaboration and innovation. While low performing suppliers can lead to unreliable quality and delivery, supply chain failures, inventory overstocking or shortages, reduced sales, and more.

But innovative SRM solutions are finally empowering Procurement to bring effective Supplier Performance Management into their supplier management programs, with continuous monitoring and evaluation of supplier performance across a range of unique areas, including:

  • Quality Performance
  • Delivery & Supply Chain Performance
  • Commercial Performance
  • Collaboration Performance
  • Innovation Performance
  • Sustainability Performance

Procurement excellence is no longer about simply reducing costs and risks, but ensuring that businesses are partnering with the best performing suppliers and driving continuous improvement to increase competitiveness and drive top-line value.

By empowering Procurement to finally succeed with comprehensive Supplier Performance Management, smart SRM systems are ushering in a new era of Procurement and redefining the value that the function delivers to their organization together with their best suppliers.

With the top-line value and future-proofing that strong Supplier Performance Management drives, there’s no limit to the ongoing ROI that an SRM system can deliver to an organization.

6. Collaboration & Innovation

Along with driving supplier performance improvements, an innovative SRM platform also enables businesses to forge strong strategic partnerships with their suppliers that foster collaboration and innovation.

With unparalleled insights and powerful supplier engagement tools, Procurement can drive enhanced collaboration with their suppliers that improve operational efficiency, ensure mutual success, and facilitate joint innovation that brings new products and services to the market faster.

By improving communication, alignment, and knowledge sharing, buyers and suppliers can build stronger trust that gives Procurement greater transparency into their supply chain and provides suppliers with increased knowledge of business objectives that they can help their partners achieve.

Fostering stronger strategic partnerships also empowers businesses to become Customer of Choice with key suppliers and gain a competitive edge by reducing the effects of global supply chain disruptions.

7. Data-Driven Decision Making

Data-driven decisions are crucial for Procurement as they enhance accuracy, efficiency, and strategic value. By leveraging robust data analytics with new SRM solutions, Procurement teams gain valuable insights into supplier performance, market trends, and cost structures, enabling them to make informed and objective choices that unlock strategic value.

Adopting a world-class SRM system reduces reliance on intuition and guesswork, minimizing risks and improving negotiation outcomes. Furthermore, data-driven decisions help identify cost-saving opportunities, optimize inventory management, and ensure compliance with regulatory requirements.

By leveraging the efficiency, data, and analytics that an SRM platform provides, Procurement teams can foster a more agile and resilient supply chain, capable of responding proactively to market changes and driving overall business success.

8. Competitive Advantages

In our ever-evolving and fast paced world, staying ahead of the competition is more essential and difficult than ever. In this pursuit, the winners will be determined by those who can harness the untapped opportunities that reside in their supplier relationships.

With the benefits of an SRM system that we’ve already covered, Procurement can empower their business with significant competitive advantages that deliver ROI across a wide range of areas. From improved efficiency that allows more focus on strategic objectives, to reducing costs and risk, to bringing innovative products and solutions to market faster than the competition, and everything in between.

Adopting an innovative SRM system doesn’t only foster stronger strategic partnerships and mutually beneficial relationships with your suppliers, but also empowers Procurement to solve challenges and spot new opportunities faster and more effectively together with their suppliers.

By leveraging cutting-edge technology that turns your supplier relationships into a competitive advantage, your SRM system can deliver continuous and significant ROI for you business via stronger supply chain resilience, increased sales and market share, improved customer satisfaction and brand value, and sustainable innovation that future-proofs your business and keeps it ahead of the pack.

9. Sustainable Impact

Last but certainly not least comes the sustainable impact that your SRM system can drive together with your suppliers – delivering ROI not only for your business but also the world at large. Besides the new ESG requirements that businesses must comply with, Procurement holds the currency of impact and the responsibility to drive sustainable transformation throughout global supply chains.

But achieving sustainable impact is only possible with the cooperation and collaboration of your suppliers – by enhancing transparency and traceability, reducing carbon emissions, improving resource efficiency, ensuring ethical practices, and collaborating to implement more responsible practices throughout all tiers of the supply chain.

While ESG initiatives are often deprioritized due to the difficulty of measuring their ROI, driving sustainable impact is undeniably essential for future-proofing businesses. But improved supplier relationships that SRM systems enable allow businesses to finally and truly adopt the Triple Bottom-Line perspective of Profit, People, and Planet.

Therefore adopting an SRM system in your organization is an investment that won’t only deliver returns for your business, but for the entire world, as well – redefining ROI as “Return on Impact.”


Given the nature of the function, we understand why Procurement teams are keen on understanding the value of investing in an SRM system. But as you can see, the ROI of leveraging new technologies to optimize supplier relationships is plentiful, diverse, and virtually incalculable. And moving into the future, there will only be new challenges and opportunities that arise where success will be determined by the strength of your supplier relationships.

For Procurement teams aiming to stay ahead in a rapidly changing market, adopting an SRM system is not just an option but a strategic imperative. But we hope that this overview of the types of ROI will make the benefits and value of adopting an SRM system more tangible.

If you’re interested to learn more about what a world-class SRM system can do for your business, you can book a meeting with the Kodiak Hub team and we’d be happy to tell you more about how adopting an SRM system is an investment with endless returns.

Kodiak Hub
Kodiak Hub
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