By Stephany Lapierre, CEO & Founder, tealbook
Businesses of all sizes, maturity levels, and industries are
facing a data crisis. While this may sound dramatic, I suggest that data quality is at the root of nearly every problem in procurement today.
Companies rely on their procurement organizations to work with suppliers and foster the relationships required to advance the business, while elevating working conditions in the supply chain as a whole. This need has paved the way for a flurry of procurement software implementations, each automating one or more aspects of the procurement process. With equal speed, technology has expanded the ways in which suppliers market themselves and connect with their current and prospective customers. These factors have left procurement with the monumental task of managing a variety of systems, fragmented data, and ever-growing business expectations.
The transactional network of relationships between the business and its suppliers ultimately produces an endless stream of resource-rich data. This volume of data is so large, and is growing so quickly, that only technology can properly mine and manage it.
Data is the foundation that a business relies on and that procurement acts on. For these reasons, data must be accurate and trustworthy. All sourcing, spend analysis, contract and supplier management activity is dependent upon the quality of enterprise data. And yet, the current state of our data is of an alarmingly poor quality. It is stored in separate systems, and duplication, omissions, and errors are widespread. Data changes at an alarming rate and is often generated in disparate systems. This only compounds the complexity of the crisis.
”If you wait to change sourcing after the tariffs, you are automatically incurring costs, losing negotiating power, and so much more.
As a result of these challenges, there is a lack of trust in business data that undermines the value potential
of every effort procurement invests in. Budgets are being overrun, and friction and delays are slowing
our processes and reducing compliance. Even P2P implementation and digital transformation projects are being jeopardized.
Many procurement teams are looking to their software to address the data crisis. Unfortunately, in-place software designed to manage one process or type of data cannot drive change beyond its intended scope. Each instance of a software solution holds a stack of data that does not connect and cannot be reconciled without significant effort, if at all.
When I discuss this data crisis with procurement leaders, I often use the example of a mobile phone. Do you remember what it used to be like when you were switching from one phone to another? Everything from contacts to apps to pictures and videos had to be manually transferred. Losing them all was not an option, but the transfer process was so cumbersome and painful that we would sometimes put off getting a new phone just because we couldn’t face it.
Today, however, the process of transferring all of this information is seamless. You can buy a new phone with the latest version of the applicable software on it, and all of your data connects over quickly and easily. So, what changed? Was it the technology? Sure, but more importantly, companies realized that phone purchases were being delayed because they had a data crisis on their hands. Competition and consumer expectations forced them to improve their processes and solutions for managing user data, and they solved the problem at the root of the crisis.
Procurement is in a similar position as we face the enterprise data crisis. Our “customers” (buyers, suppliers, budget owners, and the executive team) are all turned off by the friction and chaos of our data. In its current state, data is damaging procurement’s internal brand and costing us marketing share.
We need to increase our data management agility and flexibility. Technology is constantly changing, which is a trend that is not likely to slow or end anytime soon. If anything, it is likely to speed up and be exacerbated by the addition of even more enterprise software.
The needs of the business come first. Procurement has to find a way to master our data as it stands today, but in a way that allows us to preserve the integrity of that data as we integrate with the latest versions of our eProcurement solutions in the future.
Leveraging machine learning and artificial intelligence will allow us to make sense of our data and increase its usefulness to whatever systems the enterprise is using. The powerful combination of trusted data and informed systems will ensure procurement has a trusted source of supplier data. With it, true value can be delivered to the organization via highly strategic decisions.