If the title said you've got a "customer data problem", you’d instantly react and want to know what can be done to fix it! This contrast in urgency perfectly articulates the problem with supplier data.
You spend millions of pounds with your suppliers, extending responsibility to them for critical parts of your product offering, and yet as a business, you’re more obsessed with the quality of your customer data than you are with your supply chain.
Effective data management is the foundation for any successful business
Anyone who knows me will tell you I've always been at home in data. I believe the 2 foundations of any successful business are 'people' and 'data': hire brilliant people, empower them with data, and they will do incredible things. Remove the data and the team is flying blind, like a pilot without air traffic control or a rally driver without their co-driver. They'll probably get around the first few corners, but eventually, the whole thing will spin off course.
Ever since Salesforce’s rise in the early 2000s, the CRM system has established itself as the de facto business tool to run an efficient and effective revenue operation. Marketing has become a data analytics game, funnel metrics are a regular reporting paradigm, and customer activity is tracked live with ever deeper layers of granularity, all geared towards squeezing every additional percent of performance from our revenue operations. It's inconceivable to imagine building a sales operation today with only Excel in your toolkit!
So it pains me to admit that here we are at the beginning of 2021, after the most catastrophic year for economic activity in our lifetimes which has brought irreparable harm to too many businesses, and we find it acceptable to manage our supplier relationships in Excel!
Done right, supplier management adds to your business's bottom line
Think back to the Spring when Covid-19 started to take hold: how long did it take you to forecast the likely impact on your revenue? Now think about how much longer it took to understand the impact on your supply chain, continuity of supply, and the resulting impact on your cost base?
We’ve become obsessed by ways in which we can optimise our sales activity, and yet there is so much more we are leaving on the table by not thinking about our suppliers. Let’s take the example of a £250M turnover business making £50M profit. To add £10M to the bottom line, I need my sales team to grow revenue by 20%. Yet I could achieve the same contribution to profitability by identifying just 5% of cost savings among my supplier base. Which do you think is more achievable?
So why have we allowed this to happen?
The answer is data.
Why your supplier data is a mess
Whether because of growth, acquisitions, or the evolving regulatory environment, the information you hold on your suppliers is typically sporadic, out of date, and fragmented across multiple ERP systems, contract repositories, business units, geographies, and spreadsheets.
How can you be expected to make better purchase decisions, manage supply chains, perform accurate compliance assessments and identify cost savings when there is no trusted source of supplier data you can rely on?
Don’t just take my word for it. A survey by Procurement Leaders in 2019 revealed that more than 70% of businesses are still using Excel or other office tools to manage their supplier relationships and risk.
And yet according to Bain’s Digital Procurement Survey the year earlier, 243 CPOs ranked “multidomain master data management” as the second most important challenge facing their businesses out of 22 major challenges.
One of the problems, as is so often the case, is that too many technology implementation projects end in failure. According to Deloitte’s 2019 CPO Survey, over 70% of companies who implemented technology to address supplier management issues were disappointed with the results, and that number increases to over 80% when it comes to supply chain risk and compliance. These are not functions you can afford to get wrong!
It’s this combination of factors – a void of robust supplier data management, an underdeveloped procurement toolkit and poor experiences with recent technology deployments – that makes me so excited about what we’re building here at OCG Software.
We're out to solve your supplier data problem
We believe that data is the fuel that powers your business. We believe that your supplier data should be as rich and reliable as your customer data. And we believe that there is significant business value to be gained from taking a data-first approach to supplier management.
We’re helping our customers build trust and efficiency into their supplier relationships by giving them complete visibility of their supplier base and confidence in their vendor master data.