By Daryle Johnson, Manager of Strategic Business Development and Data Management and Visualization
The best strategies for managing supplier data really depend on what’s best for your business, but there are a few proven ways that can yield results no matter your needs. They all relate back to one primary concept: don’t let your supplier data become stagnant. It should be continuously active, a constantly updating reflection of your constantly changing business. Here is Onebridge’s foolproof formula to create a dynamic source of supplier data truth.
Step 1: Automate the supplier registration process. It’s easy to think that saving time is the only benefit of automation, and that it works strictly from rigid process templates. What if you realize a year later that the process template needs improvement? Can your IT department edit and optimize your automated processes for you within a reasonable amount of time? These questions and more can make it seem like the ROI on automation isn’t worth it. The reality is that automation not only saves your team time so they can do work of a higher quality, but also majorly reduces opportunities for data errors. This is in part because automation offers real-time, immediate information which provides a much more reliable foundation for decision-making than last year’s data. And in the right hands, automation is flexible and can be built around your specific business needs. Work with the right consultants (like Onebridge) and you’ll build the in-house capability to optimize your automated processes as needed. The reason this is important to understand is that your organization can’t afford to fall behind evolving technology and business requirements. The key to success is proactively anticipating and moving with change, rather than trailing behind it with reactive decisions.
Step 2: Regularly clean your supplier data. Set up a regular cadence for updating your master data. Most businesses clean their master data once a year. Some tips for data cleansing:
Close stale supplier accounts. Archive them so you don’t lose all information in case you’d like to work with the supplier in the future. You may benefit from setting up a segmented list of suppliers you work with on a regular but infrequent basis to keep truly stale accounts separate.
Complete missing supplier data fields. An easy place to start: vendors you’ve worked with for a long time. It’s easy for data entry to get lax with long-term accounts. There is often an innate understanding and familiarity between the businesses and the people managing the accounts that puts little priority on documenting the details. This can be great for the business relationship, but bad for data accuracy.
Remove supplier duplication. Duplicate supplier data can result in double payments, which no business wants to deal with. It’s much easier to prevent a payment than recover it. Prior to reviewing, make sure that you fully understand potential relationships between suppliers. Knowing whether two suppliers roll up to one parent company can help you recognize a true duplicate.
Step 3: Segment your suppliers into lists. This can help a great deal in matching up suppliers with the best opportunity within your organization. Price tiers as well as groupings based on past performance may be helpful for your internal buyers. Don’t forget to check in with them to find out what type of lists would be most useful. You may be surprised by what you learn. Update and rethink your lists as regularly as you clean your data.
With these three tips, you can keep your supplier data easily accessible, up to date, and full of information that’s useful to your internal customers, as well as your reporting efforts—which are key to proving the value of your work.
It’s not uncommon for internal IT departments to be unable to help with some of these tasks, especially within a short time frame, and the last thing you need is a one-size-fits-all data solution that’s so difficult to customize for your business that you might be better off doing nothing at all. That’s why Onebridge spends time embedding our team within our customers’ teams and understanding their unique challenges to create a customized solution. Contact us now to learn more,