Building the Business Case for Managing Suppliers With Technology: 7 ROI Levers (Part 1 — Active Supplier Management)

The return on investment (ROI) for supplier management does not have to be nebulous. With limited effort, procurement organizations can build a compelling business case for supplier management either as a component of broader source-to-pay implementations or on a standalone basis, as well as to develop specific KPIs to measure overall program savings and ongoing cost avoidance.

In the first two installments of this series, we introduce the primary ROI levers of supplier management technology initiatives. Our introduction to the topic explored the three levers at the front-end of the supplier lifecycle that can form the foundation of a business case. Today we continue our exploration of the seven primary ROI levers, with an emphasis on those in the “active” phase of supplier management efforts. These include contract compliance and enforcement, compliance and credentialing, and performance and risk management. Later in the series, we will provide more detailed ROI model inputs and ranges procurement teams can use in building a business case in each of these areas.

When you’ve got your supplier management business case ready, check out the latest Spend Matters Supplier Management SolutionMap to see how supplier management solutions such as Aravo, ConnXus, Determine, GEP, HICX, Ivalua, Jaggaer, SAP Ariba, State of Flux, SynerTrade and Zycus stack up in each of the areas we pinpoint as savings levers.

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