5 Key Skills That Make an Effective Supplier Relationship Manager (Part 4 of 4)
Ethan Healy Junior Consultant

What is the most important aspect of an effective SRM?


Welcome to part 4 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.


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. We now will look at Risk Management and Service Design.

4. Risk Management

If you are running a team of supplier relationship managers, it is absolutely essential that you have the ability to monitor and up-skill when it comes to risk assessing the suppliers you are holding relations with, both before you settle contractual agreements, and across the whole of the relationship’s time period. This is because some vendors can hold responsibility in storing some of the data and information critical to the processes and people of the organisation. A good example would be a HR system having the personal details of your employees (such as contact numbers, addresses and salaries) which would be so important to keep safe for the sake of your employees’ well-being. Therefore, ensuring your SRM team holds risk reviews whilst managing the vendor’s ability to securely uphold the requirements your organisation insists of most across security will help to easily prevent any loss, breach or misuse of personal and confidential data and information.

The initiation, review and maintenance of these risk assessments should be monitored and reviewed as a matter of crucial decision-making between the SRM leader and the head of procurement. So, your leader and other members of the SRM function need to have a wide range of insight and consistent knowledge of the risks your vendors may impose towards the business. This allows for your security department to handle those risks which are way above the acceptance criteria, compromising the continuity of the products or services you provide to your target audience. It is also beneficial to have a good understanding of your organisation’s criteria, in terms of what they accept of risk towards the business (both in the market and across the cyberspace) and what they see to be as potentially damaging impact towards the business. That will allow your SRM function to make quick and rational calls from risk assessments to determine whether or not a thorough review is needed.

5. Service Design

The final trait that a competent supplier relationship manager or SRM leader needs to have is the ability to complete and maintain service life cycle documentation for all of the products and services provided by the vendors that matter most. This is where the SRM team have the ability to look back at the services vendors provide via certain designs, descriptions and ideas expressed by third-party vendors. This includes innovative and creative projects suited to your needs and put together between both parties.

Keeping these service designs in a cycle can help to bolster consistency across your vendors, monitoring and measuring the vendor’s performance against the ideas they have intended to put in place for the support of the organisation. This also includes cycling the budgets and investments plans you intend to make with these service designs, which in turn needs critical approval through review meetings. Focusing on the outputs from the service design should be the main turning point as to why you believe these service designs are worth investing in, for the sake of your business and your vendor relations and partnerships.

Working across projects collaboratively with your vendors is, therefore, another essential trait the supplier relationship manager should hold in order to develop upon new service designs as well as existing ones, where appropriate for the continual growth of the organisation. Testing, reviewing and maintaining these service designs makes up the service life cycle and therefore improves your intentions to aim bigger with the help of the vendors which are proposing ideas to bolster what the organisation strategically aims for.

Thank you for reading our series on the top 5 skills needed from an effective supplier relationship manager.

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