Supplier relationship management is a comprehensive approach to managing an enterprise's interactions with the organizations that supply the goods and services it uses. The goal of supplier relationship management (SRM) is to streamline and make more effective the processes between an enterprise and its suppliers just as customer relationship management (CRM) is intended to streamline and make more effective the processes between an enterprise and its customers.
SRM includes both business practices and software and is part of the information flow component of supply chain management (SCM).
SRM practices create a common frame of reference to enable effective communication between an enterprise and suppliers who may use quite different business practices and terminology. As a result, SRM increases the efficiency of processes associated with acquiring goods and services, managing inventory, and processing materials.
SAP SRM simplifies and automates procurement. The SAP SRM process integrates supplier qualification, negotiation, and contract management more tightly and cost-effectively with other enterprise functions and their suppliers’ processes – through a single framework with support for multichannel suppliers.