Most procurement teams find themselves on a digital journey of some kind right now. Usually, this means investing in technology, automating as many processes as possible, and enabling distributed buyers to independently get what they need with minimal fuss. While these steps are all important, they overlook a critical question: Who is managing the data supply chain?
No, that’s not a typo. In this case, I don’t mean supply-chain data — I mean the data supply chain. This is the information about suppliers — current, qualified, and prospective — from which an organization might buy products and services. Some of this data comes directly from the suppliers themselves, some from internal buyers and procurement professionals, and some is generated by the systems we use to make and track purchases.
Like any other enterprise input or resource, data needs to be “processed” as it goes from its original raw state to a form that people can actually use to do their jobs. This means that data supply chains, and the “products” they provide, have to be trustworthy if they are to deliver what the business needs from them. All of the value associated with a data supply chain resides in the quality of that data. High-quality data has strategic value to the enterprise, while poor-quality data can slow things down, send people off in the wrong direction, or stop progress altogether. No one is going to reference data that they don’t trust.
According to the 2018 Data Quality and Governance Study run by the Supply Chain Resource Cooperative at North Carolina State University, “Only 15% of respondents believe their existing systems are capable of producing clean data that can be trusted.” In addition to that, “75% of businesses say that poor quality data has made it challenging to achieve their digital transformation plans.”
There’s no question that poor-quality data is a roadblock to digitization and other critical business objectives that are tied directly to competitive advantage. The challenge facing procurement organizations today is how to build or restore that trust, first by resolving the data quality problem, and then by making sure decision makers know they can finally trust their supplier data.
The amazing thing about data-quality issues faced by procurement today is that they’re systemic. Much of the data we collect is standardized, especially in the area of supplier-information management. If we can fix the process of collecting new data and clean up or enrich the data we already have, the trust factor of that data will skyrocket.
Most people think that by turning to the cloud, they will instantly gain access to quality supplier data. Unfortunately, that’s not the case. This is why we see another wave of cloud technology emerging. It enables a supplier-data cloud with information that has already been cleansed, enriched and validated and can be accessed by many companies, becoming even more trustworthy each time it’s leveraged by a new enterprise. It’s the only direction the industry can go.
Data and systems integration are usually a focus because of their ability to ensure user convenience and compliance, but they also improve visibility. Knowing where to go for supplier data, and having a high level of trust in that data, increases the overall understanding by procurement, stakeholders and the executive team of spend and suppliers. We should never underestimate the value of being able to quickly and easily get a clear answer to a business question. Not only does this ensure that the operation keeps moving, it also increases the level of confidence associated with supplier data-driven decisions.
Once data is in one place and fully integrated with all of the processes and systems that need to draw from it, the opportunity has only just begun. Procurement can then start adding additional value into the data supply chain — and supply-chain data. Information such as specific tags to describe supplier capabilities, physical addresses and e-mail contacts, and diversity status can better inform buying decisions and expand the range of what can be achieved.
Supply-chain data absolutely has to be trustworthy if the enterprise is to be competitive. Before this can be achieved, however, someone has to manage the data supply chain itself, drawing on proven resources, improving data collection, and cleaning up the data that has already been collected.
Stephany Lapierre is founder and CEO of Tealbook, a procurement platform.
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