We were joined by the unstoppable Susan Walsh this week, along with 20 other procurement leaders to talk through our approaches to fixing dodgy supplier data. We've pulled together some of the highlights from the discussion to help you improve data quality at your own organisation.
Do management know they have a supplier data problem?
Senior leadership rarely question how long it takes to pull together insights from dodgy data, or whether the data is accurate enough to identify trends
Whether you need more customers, you need to make cost savings, or increase profitability, data has an answer for everything
Because there's not a one-size fits all approach, you will need to tailor how you manage data into a way that suits what's driving the business
It's not uncommon that what the data says is true for spend costs may be inaccurate by up to 10 figures
"If you lost all your supplier data tomorrow, would that be a problem? If it is a problem, you need to do something about it."
Susan Walsh, The Classification Guru
What's the financial value of supplier data?
Data never appears on companies' balance sheets as a financial asset, however, it's often a core driver of business's value, so CFOs should pay attention to it
There's a clear cost too. Sensitive data shared with suppliers is sometimes lost or stolen, and the loss of IP as part of these accidents impacts businesses' bottom line.
Data owners can prompt senior leaders to consider the value of supplier data by asking them whether - if the data suddenly disappeared - how much of an impact that would have on their business.
What challenges stand in the way of high quality supplier data?
Employees are never trained on how to manage supplier data, and without this knowledge, there will never be a common industry standard.
When someone leaves a company, they take their data management processes with them, causing the quality of data to deteriorate over time.
It can be difficult to position supplier data as an investment, not a cost. It's not uncommon for million pound projects to fail because the data isn't accurate.
5 Steps to fix your supplier data
The roundtable attendees identified five simple steps to fix your supplier data, and maintain its quality:
1. Take Responsibility: Who owns your supplier data?
From procurement to finance, different departments need different things from supplier data, but a lack of agreement about who is responsible means the dataset is managed poorly - or not at all.
With no clear owner, no one is managing data quality, so the dataset deteriorates over time.
2. Build a Data Culture: Solving your data problem starts with your people
The people who input data rarely care about its quality.
Staff are rarely trained on how to manage data in their organisations, and there is a lack of understanding at an industry level.
Data admins must follow a consistent process and understand the contextual importance of the data to their business.
3. Get the Right Systems in Place: Systems need to bring consistency and trust
Most organisations’ supplier data is fragmented across multiple IT systems and Excel files, with no consistency.
Supplier records become duplicated and siloed, so it’s almost impossible to build a complete picture of a supplier.
Most supplier data comes from the ERP, which is typically a rigid and inflexible system that is inaccessible to Procurement.
4. Build a case to invest: Data should be seen as an investment, not a cost
Senior management rarely understand the value of data and the inefficiencies that come from poor quality data.
Unlike technology IP or brand equity, data is not recognised as an asset, so spending on data does not drive an ROI figure.
A simple way to demonstrate the value of data is to imagine the impact of losing access to it.
5. Show the transformation: Track how data has been improved strategic decision-making
Procurement is often seen as a transactional department, not a strategic one. But with the right data, Procurement can support.
Clean data can save 5-15% of turnover through greater efficiency and improved decision-making.
If you'd like to be part of a future session, or if you'd like to understand more about how to better manage the vendor master record in your organisation, get in touch with me at firstname.lastname@example.org