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5 reasons why Procurement needs to move beyond Excel

When it comes to managing suppliers in complex supply chains, procurement needs to move beyond Excel with a tech solution so that procurement teams can excel.

With Canopy, Procurement moves beyond Excel and embraces new ProcureTech solutions
Moving beyond Excel and embracing the new ProcureTech unlocks value for Procurement

I love Excel!

You probably weren’t expecting to read that when I’m about to tell you that it’s time to leave Excel behind.

Spreadsheets are everywhere. It’s hard to find a better solution for storing and managing data in multiple areas of business operations. From project management to scenario planning, forecasting and DCF modelling, Excel has made analysis of data accessible to the masses. Many people, me included, use spreadsheets to great effect in their personal lives too, from managing their finances to planning Christmas dinner (yes I have a spreadsheet for that too!)

But for procurement teams, the versatility and universal access of Excel has meant we’ve become over-reliant on it as the primary tool to manage increasingly complex supply chains. Just step back and look at the data you hold in Excel today. It’s patchy and inconsistent, and after many years of use has become hard to manipulate because the file is now too large. It's also probably not very visible to the organisation.

We believe there are five clear reasons why it’s time for Procurement to look beyond the spreadsheet.

1. Your data will be inconsistent, missing, or out-of-date

The first problem with Excel is that there is no consistency in the data you hold about each supplier. In all likelihood, there will be large gaps, because of the haphazard way in which you've collected that data. In our experience, some quite basic and often fundamental information can be missing, such as company registration, contact details, and supplier categorisation.

One of our customers recently shared their Excel database with us, only to find that 61% of the data fields required by ERP to pay their suppliers were blank.

So when you need to check the supplier’s insurance information or find their contact details in an emergency, inevitably you can’t find it. Information needs to be collected consistently. That way, you build a complete record that can be relied on when there's a crisis.

2. You can’t trust the data you have collected

Of the data you do hold in Excel, it’s difficult to establish the accuracy, provenance, and recency of the data. Most of us rely on a ‘data clerk’ to manually enter data (i.e., copy/paste). But to quote Canopy’s founder, Doug McLean: “Data creators don’t care about the quality of the data they enter, because they don’t use it.”

The supplier doesn’t have an opportunity to check the data, since you’re never going to let them have access to your “Master Database.” It’s hard to pull data from third-party trusted sources. And if you’ve not quite got your permissions right, anyone with access can edit.

Even if you’re confident the data is accurate, it still relies on someone entering it correctly. For instance, UK sort codes must be six digits and phone numbers must begin with a zero. You’ll want to make sure that spend data is captured in a common currency. In Excel, a formatting change could easily cause a leading zero to drop, or otherwise change the appearance (and contents) of the cell. This makes for data that’s unreliable across a huge supplier dataset.

What’s more, you won’t know that the data is wrong until you try to use it. To share a recent statistic, only when one of our new customers embarked on a data cleanse exercise did they realise that the name of the supplier was incorrect on two of every three supplier records.

3. It's hard to build automation into Excel

One key disadvantage for Excel is that there’s no workflow. Take the data approval process: once someone has entered the data, there’s no scope for prompting users that it needs approval. Data is immediately made available to everyone who has access to the spreadsheet (in a Cloud world) or as soon as you send them the latest version.

Another example is when data is about to go out of date. There's no easy way to notify people that they may need to update their information or upload new documentation, such as an insurance certificate or business permit. In Excel, that’s all got to be done manually, through conditional formatting and regular human checking. What a waste of time!

Wouldn’t it be simpler to have your data monitored in real time, so you can be notified you when something needs your attention? And to have clear lines of approval before data is ‘accepted’ as the trusted record?

4. The more you share, the less secure your data becomes

Of course, Excel has itself developed over time. Office 365 and other Cloud platforms have eliminated previous problems of version control and access permissions. But allowing the data to be visible across your entire organisation raises the risks to data security. For instance, not everyone who needs to be able to see basic company information needs to be aware of the commercial terms you've agreed with the supplier. They won't need to see their bank details, or if they're currently being investigated for an alleged offense either.

The other challenge with Excel, and other ‘Office’-based tools is that data needs to be transmitted on email. You'll be sending the spreadsheet to a supplier, who fills it in and sends it back on email. Now I’ve got banking details traversing the web. Or worse still, they're saved on my laptop hard drive which then gets stolen.

The stakes for data security could not be higher. The volume of data Procurement relies on is increasing, and the legislative obligations to collect highly sensitive compliance information are ramping up. We need to find a safe, secure, and easy-to-manage way to allow the organisation access to data without risking a catastrophic data leak

5. Your data is useless unless you can leverage it to bring true business value

Having the data is one thing. Deriving value from it is another. Excel provides a range of tools for those creative enough to develop the means to analyse their data. But it falls to the individual to know what they need to do, and to be consistent in their frequency and approach.

The world of ProcureTech has exploded with a wide range of tools that can take the guesswork off your hands. New tech solutions can bring key business KPIs like spend, risk, and performance to life. And they present actionable insights to over-worked teams so they have clear guidance on where they can deliver value.

Furthermore, it’s no good keeping your data in Excel when it’s your ERP system that governs which suppliers are getting paid, and your RFP tools that determine who should bid for a piece of work. You need to feed the data to your downstream systems if you're to align the whole organisation on a trusted record of the supplier.

Procurement needs to move beyond Excel. It’s time for an intuitive system

For a true Excel guru, it may be possible to meet these five challenges head-on by using macros, formulae, and some clever VB skills. But those gurus are few and far between. As for the rest of us, it’s time to get some help. Ultimately, your supplier management platform has got to work for the least IT-savvy person on your team. And that's where Canopy comes in, to help you safely manage your supplier data.

With Canopy you can:

· build trusted, accurate and complete Vendor Master Records for each supplier, that give you consistency in the data collected and are proportionate to the risk the supplier poses to your business.

· validate the accuracy of your data at the point of entry, so you don’t end up with ‘dirty data’.

· ensure everyone in your business adheres to your desired approval workflows and business rules, so that suppliers are only made available for trade after they have been properly vetted by the relevant teams.

· automatically monitor your suppliers and inform your users when something requires their attention.

· feed trusted data to your downstream systems, such as ERP, and use the data to control the availability of suppliers for trade (e.g., turning off POs when a supplier falls non-compliant, or their contract expires).

To find out more about how the Canopy platform outperforms Excel when it comes to supplier management for complex supply chains, contact one of the team today.

Post by Nick Verkroost

Nick is an experienced business leader and the CEO for Canopy (OCG Software), the rules-based Supplier Management platform. Nick's focus is on commercial and operational excellence and ensuring our clients maximise the opportunities that Canopy offers.


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