Procurement and Sourcing executives cite the negative impacts of misinformation and outdated supplier information as a global need for accurate data grows.
Supplier data —more than ever— is a business-critical component of the operations for organizations worldwide. However, even while recognizing the vital role that supplier information plays in business operations, enterprises are experiencing severe problems resulting from misinformation and outdated supplier records, according to the 2020 Supplier Information Study, commissioned by TealBook, a Big Data company that provides a mechanism to fix enterprise supplier data.
The survey revealed a staggering number of critical issues that organizations are dealing with as a result of poor supplier data. Probably the most shocking result was that 93% of procurement and supply chain leaders had experienced adverse effects of misinformation about their suppliers, and nearly half (47%) experience such negative effects on a regular basis.
At a time when finding new suppliers is of paramount importance, companies also spend an average of 21 days to validate and onboard suppliers. What’s worse is that 81% are not completely confident in their supplier data, according to the survey. In fact, 60% of executives reporting outdated supplier information say that it took them four days to update that information, showing that even seemingly small hiccups can cause severe negative consequences, such as missed deadlines (51%), unhappy clients (42%) or even financial loss (40%).
The lack of up-to-date supplier information is by no means isolated to structured procurement organizations. In fact, the negative impact was documented on both the procurement organization and the suppliers: consequences include wasted time (63%), delays in projects (47%), and worse, terminated supplier relationships.
Perhaps most alarming is the finding that more than half of respondents (58%) who use a supplier portal say that they don’t trust their suppliers to always keep their information up-to-date. In fact, all of this data misinformation has led to many executives citing financial losses with two-thirds (67%) of those cited experiencing such loss within the last six months, demonstrating how frequent and prominent this issue occurs.
Based on the survey results, it’s clear that businesses are experiencing serious consequences as a result of outdated and incomplete supplier data. Moreover, companies are still using time-consuming methods to research and validate their suppliers, with many relying on antiquated methods including online search engines (63%), industry conferences (63% and industry publications (59%).
“Trusted supplier information is the most critical asset a procurement organization can possess. This information is the fuel that powers all procurement technology, it influences billions of dollars of business decisions, and without it, organizations lose the ability to be agile when supply chains become overrun,” said Matt Palackdharry, Vice President of Sales and Commercial Strategy of TealBook. “The need for trusted supplier information will only continue to increase over time. The whole world is feeling the effects of COVID-19, and geopolitical issues will force us to rethink regional economic structures. Without trusted supplier information, making informed decisions during this time is impossible.”