Can you honestly say you have full confidence in the data your procurement team uses to make decisions? Will your data help you stand strong against disruptions? Does it allow you to venture past relationships with just the big guys and source smaller, diverse suppliers as well?
If you can’t give a definitive “yes” to any of those questions, you need to start reconsidering how your procurement team has been gathering and managing data. Too often, organizations will get pieces of supplier data, add them to a spreadsheet, and assume they will stay viable for use in the future. However, our industry is constantly changing, as are the details of your supplier information.
In order to have supplier data that is reliable and serves future procurement decisions, processes need to be put in place to ensure the data is consistently enriched for completeness and accuracy.
So How Do Procurement Teams Access Clean Data?
The best way to ensure your organization has access to the most reliable refreshed data is to invest in technology that does the job for you and establishes a supplier data foundation.
Establishing a supplier record that captures (and maintains) multiple levels of clean, self-updating information isn’t just transformational, it’s critical — especially one that can continuously grow and learn with your business over time.
Out-of-date supplier information isn’t just useless — it’s a liability. Once upon a time, you could call in a consultant for an expensive clean-up project, run some spend analysis cleansing/classification, or go through a recovery/audit analysis.
Today, business moves too fast for one-time efforts. Supplier data can become stale within minutes, leaving teams beyond procurement, such as AP/finance/treasury, supply chain, operations, diversity, and many other cross-functional departments scrambling. Supplier data enrichment is essential in this context, ensuring that procurement maintains the most accurate and reliable information. But procurement is the organization with the most on the line.
According to Spend Matters, these are actual examples that highlight the costs of traditional approaches to supplier information management, even with sophisticated supporting source-to-pay technologies:
Scenario 1
One organization, when introducing new contract terms and conditions found 80% of letters sent based on vendor master data were returned because of bad address information. Supplier data enrichment could have prevented such issues by continuously updating and validating address details.
Scenario 2
A firm brought remittance advice routing in-house to reduce banking charges, but through an activity-based costing effort, it found that the most expensive component of the initiative was acquiring and maintaining correct email and contact information for suppliers. Supplier data enrichment simplifies this process by automating the update of contact details.
Scenario 3
After choosing a comprehensive invoice-to-pay solution, another company found that it took more than two years to clean up vendor information to a point where it could gain the efficiencies needed from the technology, delaying planned ROI and wasting a huge amount of time and effort.
With supplier data enrichment, the company could have streamlined this process, allowing for quicker access to technology benefits.
A clean and correct supplier record that autonomously updates and grows stronger over time benefits not only the business but also, as these examples demonstrate, procurement. Consider how most employees interact with, depend on, or influence the required performance of suppliers in some way. Supplier management is part of everyone’s job description.
Symptoms of bad data: A checklist
✓Lost payment and working capital optimization opportunities
✓Inability or delays in finding the right set of new or alternative suppliers
✓Significant hard dollar costs of manual record search, data-entry and rework
✓Delayed ROI and high visibility flaws of other procurement technology investments
✓High costs and time delays when onboarding new suppliers
✓Doing business with suppliers that you have no business working with due to non-compliance, poor performance, incumbency, etc.
✓Stale, expired, and incorrect information that can lead to hard dollar compliance costs, fines, violations, and more
✓Sourcing from the big guys as default vs. innovative, diverse businesses
✓Brand risk: Do you trust your supplier data, processes and compliance protocols to keep you out of the headlines or minimize brand damage?
So what do you do? A typical clean-up process (it works, but it’s arduous)
Health Check
Stakeholders need to understand the scope and importance of managing supplier data. Perform a health check using analytics across all systems to highlight data quality.
Assess Need
Identify systems to integrate and how (ERP, HR, inventory; CSV, API, XML, etc.) Use core reference data such as users, suppliers, GL account structure, and transactional data like POs, invoices, change orders, and receipts.
Clean
Expend a lot of time and energy to clean up your current data record; make sure there are no missing fields, everything is mapped properly, and data is enriched. Potentially pay a third party (upwards of $300K in some cases) to do this.
Look Outside
Create a process for bringing in, cleansing, and uploading external data (potentially also paying subscription fees).
Repeat
Wait five minutes for someone to manually enter something somewhere, and start the process all over again!
What If You Could Have A “System Of Reality” Vs. A System Of Record?
Legacy approaches just won’t cut it anymore — and moreover, they’re a massive waste of your time (and money).
Establishing a supplier record that captures (and maintains) multiple levels of clean, self-updating information isn’t just transformational, it’s critical — especially one that can continuously grow and learn with your business over time.
To get started, break it down into steps:
How to Clean Up Your Supplier Data
In a rapidly evolving business landscape, maintaining reliable supplier data is no longer optional—it’s essential. As procurement teams strive to stay competitive, having accurate and comprehensive supplier information is vital for informed decision-making. This is where supplier data enrichment becomes crucial, transforming outdated records into a robust data foundation that powers strategic procurement.
The Challenge with Manual Methods
Many organizations still depend on manual processes, using spreadsheets, web searches, and even paper business cards to track supplier information. These outdated methods not only consume valuable time but also hinder agility and innovation. As the industry shifts, so too does your supplier data, making these manual methods inadequate for keeping pace with change.
The Importance of a Reliable Supplier Data Foundation
Traditional data management approaches can result in stale or incorrect supplier records, leading to compliance risks, lost opportunities, and operational inefficiencies. Creating a self-updating supplier record is transformational. It supports procurement teams in moving beyond established relationships with large suppliers, enabling them to engage with smaller, diverse businesses effectively. Through technology, procurement leaders can automate and enhance data accuracy, ensuring the information is fresh and actionable.
Analysis: Begin with a comprehensive health check of your existing supplier data. Leverage analytics across all systems to identify inconsistencies, gaps, and outdated information. This initial analysis is crucial for understanding the scale of data discrepancies and setting a clear path forward.
Cleansing: Dedicate resources to clean your current data records. This process involves ensuring no fields are missing, mapping data accurately, and enriching it with additional information where necessary. Consider engaging third-party services if the scope is beyond internal capabilities, though this can be costly.
Enrichment: Finally, focus on supplier data enrichment by integrating external data sources. This step enhances the depth and breadth of your supplier data, making it more robust and insightful. Advanced platforms like TealBook use machine learning and AI to transform raw data into a rich, continuously updated supplier database
By adopting these steps, organizations can establish a dynamic and reliable supplier data foundation that supports strategic procurement goals, drives innovation, and mitigates risks. Embrace supplier data enrichment to unlock new opportunities and unleash the full potential of your procurement capabilities.