Accurate supplier data, a dream for many procurement specialists, however, why is this still just a dream? Shouldn’t this be the number one priority within procurement? For if your vendor master data is not accurate, how can you achieve a high level of excellence? You cannot. For the information in your vendor master database is the foundation for all procurement activities; P2P processes, sourcing, purchase orders, compliance and any payment process.
A recent study held with 350 procurement executives, shows that 94% of the procurement executives does not fully trust their supplier master data. Two main reasons; companies find it a challenge to find reliable sources to validate and enrich their database. Once they do find a source, the second issue arises; can they trust the data provided by this source? Key; finding a reliable partner to enhance your vendor master data.
So, we know that accurate vendor master data is a key component and that is not an easy task to get accurate data. However, what does accurate data mean? One can have a correct vendor name, address and bank account but missing a VAT number. The data is accurate, not complete. Therefore, accuracy is more than just correct information, it is also complete information. And in addition, what was correct last year, could be completely incorrect this year, for companies move, merge, change name, ownership and so forth.
There are two solutions in practice; supplier portals and P2P automation networks. The portals, such as Ariba, are reliable for the fact that the data input comes from companies itself, so the accuracy of the vendor master data is nearly perfect. However, not all companies make use of such a portal, and not all supplier portals have the advanced functions necessary to achieve a high level of data capture and verification. Therefore the use of online supplier portals is not enough to ensure accurate vendor master data, not yet at least.
The use of P2P automation networks to clean and enhance your supplier database is a more effective way to get maximum results. Your database gets enhanced, all missing data will be added, all duplicates removed and so the quality of your data becomes more accurate. One way of doing this is through datamining, with preprogrammed algorithms in place one can detect errors; duplicates, missing data, incorrect data and so on. This is a reliable way of detecting errors. And the enhancement happens with the input of a large database, which can have its limitations, however on the road to complete accuracy this is the first step to take.
The road to a perfect vendor data management is still a long one, but the first good solutions have arrived on the market. Don’t sit around waiting for the perfect solution, for you can wait for a long time and miss the boat, or get on board and start enhancing and cleansing your vendor master database today.