Building the Business Case for Managing Suppliers with Technology: 7 ROI Levers (Introduction)

If Rodney Dangerfield had ever worked in procurement, he would have been in charge of supplier management. While supplier management does get some respect, the late Dangerfield certainly would have agreed it does not get the respect it deserves.

Part of the challenge in garnering respect for supplier management is that it touches on so many workstreams, processes and business functions. And we’ve got to say, it’s also not as sexy as spend analytics, strategic sourcing, contract management or even spend management. Compounding these challenges is that few procurement, finance and shared services organizations have earnestly attempted to develop a business case and ROI model for investing in supplier management on an end-to-end basis. But trust us: If you do, you’ll run (not walk) to doing it right.

This Spend Matters PRO research series aims to both demystify the business benefits of doing supplier management “right” and help organizations build a business case to invest in supplier management processes, as well as supporting software. It also explores the ROI drivers organizations might consider in creating their own business case for rolling out a supplier management solution or building on investments they’ve already made.

In the first two installments of this series, we introduce the primary ROI levers of supplier management, starting first with those at the front end of the supplier lifecycle that can help with building a business case. Later in the series, we will provide more detailed ROI model inputs and ranges that can be used in building a business case in each of these areas.

Spend Matters PRO clients can also contact their client services representative for an interactive Excel-based ROI model that can serve as the basis for building supplier management business cases.