The 5 Building Blocks of Supplier Management Capabilities

As an analyst you want to define things, classify them and put them in buckets to be able to analyze and compare them. Often that works fairly well, and we can rate vendors and solutions against each other to find the best fit in any given situation.

But in some areas this is more difficult, mainly because some areas of procurement are less defined from a process perspective. One such area is supplier management, where solutions go under many different names, among them different variations of supplier relationship management (which SAP laid claim to back in the day by naming its entire procurement suite “SRM” to create a nice analog to the “CRM” world), supplier lifecycle management, supply base management or just supplier management. The problem, however, is that both buying organizations and solution vendors often mean very different things by supplier management.  In our view of the market, we simply drop the “lifecycle” part (although we sometimes use “SXM” for shorthand to have the “X” represent everything supplier management related), and simply use the term “supplier management.”

So, in true analyst fashion for Spend Matters PRO, we have defined five supplier management capabilities, or building blocks, to get some structure:

* Supplier Information Management (SIM).
* Supplier Performance Management (SPM).
* Supplier Relationship Management (SRM).
* Supplier Risk Management.

* Supplier Quality Management (SQM).

So now we can classify supplier management solutions by these capabilities. Pretty straight forward, you would think, right? But not so fast.