Supplier data quality – the Achilles heel of your procurement organization

Supplier data quality – the Achilles heel of your procurement organization

Posted by Pete Loughlin in Global Sourcing, Procurement Best Practices, Purchase to Pay, Spend Analysis 28 Jun 2011

Purchasing is a complex set of interconnected and dependent people, processes and technology. – market knowledge; benchmarking information; purchase to pay and accounting systems and processes and last but by no means least – data. Data – your procurement organization’s Achilles heal.

Data can be mundane but it is the source of most procurement savings. Knowing what you spend with whom with a level of accuracy that makes it reliable is fundamental to the effective operation of a procurement function.

Purchasing Insight logoJason Busch at Spend Matters, introducing what looks like an extremely interesting  webinar, (check it out here), puts it like this: “Today, the typical large or middle market enterprise is losing millions of dollars in potential savings because of dirty supplier data in areas that have nothing to do with sourcing. Here at Spend Matters, we believe it’s high time to take out the broom and some Lysol and show organizations how to not only create clear supplier records on a one-time basis, but how to maintain high levels of quality supplier data overtime.”

It’s not just data about spend that can be critical in delivering savings. Simple things like incorrect spelling and unnecessary duplicate records in supplier master data can make the difference between success and failure in a P2P project like AP automation. Computers are dumb and the only way they can replace people is if you give them accurate data to work with. They won’t make the connection between Acme Inc. and Acme International Inc. and they don’t apply the kind of common sense day to day decisions that a good AP or purchasing department makes to keep supplier relationships intact despite errors.

Data may be dull. It doesn’t sit at the glamorous end of the procurement world that we like to think of as a “people business” – but in the twenty first century it’s like body armor in battle and poor data can be the weakness that can kill an otherwise strong procurement organization.


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