Supplier data management is a task that often seems too big to tackle. When an investor works with hundreds or even thousands of different suppliers, keeping tabs on all of them can range from tedious to impossible.
Managing supplier data serves many critical functions, and improper supplier data management can cost organization more than just time and money. Bad supplier data management can expose the company to legal, reputational, regulatory, and security risks.
Good supplier data is at the heart of any successful supplier management program. Understanding why data is bad and learning how to fix it is a great way to increase productivity while saving time and money.
Consider the following;
It is critical that the data collected correctly describes what it represents. This ranges from misspelling supplier names to inputting incorrect tax ID information. When the sources for supplier data are random emails and old spreadsheets, the entrepreneur bound to have inconsistent information.
Addressing data accuracy is best done by identifying a single source of information. A single source for supplier diversity reporting information should be the supplier themselves, and they should be capturing supplier data via a self-service supplier onboarding portal. This data should be housed in a single area and be accessible to all departments that need it. This makes addressing data anomalies and mistakes far easier.
Incomplete data can and does affect decision-making. When businesses don’t have the same information attribute captured for all suppliers, how can they compare them? Incomplete cost averages can cause their department to lose money; incomplete capability data can mean they’re not making the most out of a great supplier diversity reporting they already work with.
Incomplete data impacts tracking supplier diversity reporting spend, too. Less than 1% of all diverse suppliers have a diversity certification, so finding out diversity information on their own can be next to impossible.
Data enrichment fills in these gaps—running the data through 300+ commercial and governmental databases can fill in important information and instantly increase the supplier diversity reporting spend without having to source a single new supplier.
Having consistent data across all specific entries for business suppliers sounds a little confusing, but it truly isn’t. Having consistent data means that when an entry is labeled “phone number”, that’s what’s actually listed in that data field, and that data field for a supplier’s phone number is labeled as “phone number” for every supplier.
Data consistency is always achieved by having a single source of supplier data. Data conformity can be addressed by setting specific attributes for specific data entries, and returning an error when those attributes aren’t met. Meaning that if someone enters a phone number where an email address should be, when the information is submitted, an error would be returned for the incorrect entry.
So, a business has got accurate supplier data, but you can’t access it to create the report that the boss wanted on her desk three days ago. What good does all that complete data do when it can’t be accessed at all, let alone quickly?
Accessibility issues range from esoteric filing systems that no one understands to data being completely segmented with access granted to only a few key individuals. What happens when the person who created those filing systems retires, or the people who have access to specific data are out sick? When processes rely on a specific person to be completed, the process is inherently broken.
Using one centralized system for data storage and access eliminates data silos and reliance on individuals. Unfortunately, lots of supplier and data management software platforms come with very few seat licenses and charge heavily for additional seats. This means that access for an entire team, let alone company, is often financially unfeasible. Ensuring everyone who needs access to data can easily obtain it should be a priority when choosing supplier data management software.
Having useful and relevant data about the suppliers reduces time spent scrolling through non-applicable data fields. Relevance may also differ from department to department, so differentiating the supplier diversity reporting data requirements based on supplier type can be helpful.
Asking a tool and die company for information regarding fabric fire safety is irrelevant data collection that not only wastes time when looking for information, but wastes suppliers’ time when they’re onboarding.
Understanding what data is important to what department and grouping relevant data saves search time. Creating different onboarding workflows for your suppliers based on industry, for example, helps guarantee the questions to ask to suppliers are relevant to them and that the data collected is useful and relevant to the business.