How Procurement can drive value from Vendor Master Data
On April 21st, 30 procurement leaders joined a roundtable with Yondr Group's Anna Williams to investigate how they can drive more value from their supplier data. These are the highlights from the discussion for you to take into your own organisation.
How can Procurement use data to better enable their organisation?
Data allows Procurement to be agile and to adapt to the organisation’s requirements on risk, quality, and spend.
Accuracy matters; a well-maintained Vendor Master Record allows for better, faster, and more informed decisions.
The Vendor Master Record protects the organisation and its customers against potential risks and breaches.
It also makes it easier for your suppliers to work with you, because is it clear to everyone what is expected
"The most important thing is making sure that we're easy to do business with"
Anna Williams, Head of Procurement & Risk, Yondr Group
How to collect supplier data effectively
Educate the supply chain and your own organisation about why the data you are asking for is important.
Only ask the supplier for their information once, thereby improving their understanding of what is required.
Segment the onboarding model to spare low-risk suppliers from unnecessarily taxing approval processes.
Consider linking the supplier record with the ERP, allowing Procurement to put a hold on new POs being raised as a powerful motivator for suppliers to keep their information up to date.
Community Data Models received mixed feedback
Industries with recognised data management standards, such as Financial Services, saw positive benefits from community models. But on the whole, there is concern that the fees involved can be a deterrent for suppliers. Other challenges include:
Suppliers expressing concern that other companies have access to their data.
A lack of standardisation requires customers to ask for supplementary information anyway.
The industry is moving from static to live data models
The traditional data collection model is built on “static” data refreshed annually.
However, 2020 has demonstrated that a lot can happen in a year and there is now more interest in “live” systems.
Live systems feed up-to-date information into the Vendor Master Record on a regular basis via APIs.
Technology vendors need to support Procurement to create connected datasets across risk, quality, and spend.
"Accuracy is everything; a decision made on bad data can be worse than no data at all"
Nick Verkroost, COO, OCG Software
What is the advantage of creating a single Vendor Master Record?
Spending more time with suppliers, building stronger relationships, identifying innovations and being easy to work with.
Being able to make well-informed decisions across the supply chain, balancing risk, quality and spend.
Removing the need for painful data cleansing exercises and other manual processes.
Reducing risk of a catastrophic failure through a lack of data management or oversight.
Linking the Vendor Master Record with the ERP, so Finance is more closely aligned with what Procurement is doing.
How can I introduce the Vendor Master Record?
The roundtable identified three simple steps to introducing a vendor master record at your organisation:
The first question to answer is, what are you trying to achieve from the Vendor Master Record?
Identify the most appropriate custodian for the Vendor Master Record. This will differ from business to business.
As the custodian, champion the Vendor Master Record throughout the business and educate everyone it touches
If you'd like to be part of a future session, or if you'd like to understand more about how to better manage the vendor master record in your organisation, get in touch with me at email@example.com