Is there ROI in SLM?
Supply chain enterprise software applications such as order management, inventory management, demand planning and logistics applications have been around since the late '90s. But according to a Forrester Research survey of 22 business executives at large manufacturing and distribution companies, only 41% of those companies have realized a noticeably positive return on investment from their supply chain management systems.
SLM can optimize business processes and provide enhanced visibility into potential risk exposure and long-term supplier effectiveness. Business executives may be skeptical about whether yet another software solution can deliver ROI when so many others have been ineffective, but an in-depth analyses of results reveals that SLM transforms the management of supplier information into a key business asset.
SLM optimizes business processes by creating common shared practices that cut across organizational boundaries and pull disparate pieces of information from functional areas of the business to create a single unified "view" for internal users, suppliers and third-party data/service vendors.
SLM-focused initiatives can provide large global organizations with tremendous value for the investment. Return-on-investment (ROI) comes from two main sources.
- First, SLM initiatives create process savings through automation, communication savings and overall process optimizations
- Second, SLM initiatives mitigate supplier risk exposure through improved visibility into supplier relationships
Potential ROI savings can be calculated through the use of models designed to forecast SLM-based projects.
Organizations can reduce supply, market and capitalization risks centered in the supply chain by deploying SLM initiatives. SLM-based ROI models have consistently delivered significant savings for large global enterprises that need to maximize return on investment in the supply chain.
Aravo can help
Aravo has helped many companies across industries realize the full ROI from their enterprise source-to-settle solutions as well as deliver superior ROI form SLM.
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"Aravo provides GE with a universally accessible application for the management of critical information around our supply base. It allows us to syndicate the information to our various systems so that we can have one common worldview of what's going on with all of our suppliers.
We are confident that the ROI is not just positive but it's massively positive."
Brad Sweeney, Corporate Initiatives Group, GE Global Procurement