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© sharedserviceslink and Tradeshift 2016
3 tips to improve supplier information managementand prepare your company for compliance and risk challenges
INFOGRAPHIC REPORT
For most companies, supplier information management has always been an afterthought. However over the last few years, increased risk and compliance requirements have made accurate and timely information more important than ever.
Today, many organizations struggle with keeping supplier information up to date, or have not prioritized projects to improve the quality of their data.
sharedserviceslink and Tradeshift conducted a Pulse Survey of the shared services market to understand how important accurate supplier information is, and what steps organizations are taking to improve supplier information and compliance.
We surveyed 50 senior shared services professionals.
Respondents included Finance and AP Directors, Data Managers, Procurement Directors, Tax and Supply Chain Directors.
Most organizations recognize this is an important area to address and improve
Over half - 52%- of respondents face issues of non compliance from suppliers.
But which kind of supplier compliance are they most focused on…?
Compliance to internal policies ranks nearly as high as external regulations.
Data quality is a problem Nearly half (48%) described the quality of their supplier information as poor or fair, acknowledging that information was causing problems to some extent. And, since 38% don’t use tools to measure compliance, the problem may be even bigger than reported.
Interest in improving supplier information is on the rise 40% are actively investing in improving supplier information and compliance.
Self-service capabilities and access to third party data to validate information are critical for a supplier management tool.
Develop a forward-thinking plan to tackle master data.
Many companies only start to address master data issues after a serious problem
occurs. Instead of waiting for something to go wrong, start looking at how important
supplier information management is to support the future of your business. Supplier data touches every part of the source-to-pay process, so it should be a priority. Develop a sense of what “ideal” looks like and work on a plan to get you there.
Read on for our results and our 3 tips to improve your supplier information management.
What is supplier information management?
Source: The Hackett Group
Past (Traditional vendor master)
Fragmented master data
Siloed data
Internal data only
Limited to structured data
Historical information
Information batches
Buyer driven information
Process driven
Static data
Present (Supplier information management)
Consolidated data
Cross functional, Cross-referenced data
Bringing in data from external sources to support decisionsIncorporating unstructured data
Predictive and intelligent capabilities
Real-time information
Self-service information
Process driving
Knowledge and intelligence
“We’ve seen a transformation in supplier information management. Going from the traditional vendor master to what we now hear being called supplier information management or supplier lifecycle management.” Amy Fong, P2P Advisory Program Leader, The Hackett Group
“For supplier information, governance is key. We believe it should be the responsibility of Procurement and the business, supported by IT. Traditionally AP enters suppliers into the supplier master, and we see procurement vetting who goes in, against a larger set of criteria.” Amy Fong, P2P Advisory Program Leader, The Hackett Group
“When we look at the profile of a procurement organization and what it takes to be World Class, having strong capabilities around the governance and management of information, as well as the systems to use it well, are key.” Amy Fong, P2P Advisory Program Leader, The Hackett Group
In a 2014 Hackett Group study on Supply Risk Management, 65% of respondents said supplier self service / self-registration was a “must-have” software feature.
The Hackett Group estimate it takes, on average, $18 to add or update a supplier record.
80%34%
had revenues of over $1BN USD
The quality of our supplier
information is poor or fair.
Supplier information is
good, but could be improved.
Supplier information is at a very high
standard.
had revenues over $10BN USD
Who owns supplier master data in your organization?
Accuracy and quality of supplier information
Have you faced an issue of non-compliance from a supplier?
What type of supplier compliance and risk aspects are most important to you?
12% 22%
22% 42% Procurement
IT
Other
Finance
AccountsPayable
2% Master data is
generally owned by Procurement,
Finance or AP
12%
52% 36%
Current performance around ensuring compliance and reducing risk within supply base
Supplier compliance measurement
The top "must-have" supplier management capabilities
About Tradeshift
48% 46%
6%
10%
38% 46%
6%
Poor Excellent
Fair Good
I don’tknow
No Yes
Compliance to external regulations
(governmental, industry specific)
Adherence to performance
requirements
Social responsibility/CSR (environmental, ethical,
health and safety, etc)
We have problems with our supplier information and compliance, which is likely putting our company at risk
Our supplier information and compliance is not
comprehensive, but we don’t believe this puts us at risk
We are actively investing in improving supplier information and compliance
Our supplier information is high quality, and we
have low risk
Compliance to internal policies &
code of conduct
Compliance to processes
82%
80%
50%
44%
32%
16%
30%
40%
14% Only 14%
of companies believe they have high quality supplier information, and don’t need to improve.
Using a semi-automated tool or software solution
that keeps track of supplier compliance
Using a comprehensive solution that manages
end-to-end supplier compliance
A combination of the above options
None of the above
22%
36%
38%
4%
38% of respondents
don’t use any tools to measure supplier compliance, so they are measuring manually, or not at all.
Ability for suppliers to update their own
information (self-service)
Flexible way to run customsupplier programs around
risk, compliance or performance
A workflow to improve new or changed
supplier data
Ability to access the risk profile of a supplier
Access to compliance templates (e.g., Anti bribery/corruption)
Improving supplier compliance
Access to third-party sources that verify data (tax
ID, bank account info, etc)
Reducing supplier risk
52% 50% 42% 38% 36% 34% 22% 6%
Self-service is key. 52%
prioritize ability for suppliers to update their own information
So what can we learn from this data?
So what can you do to improve? Here are 3 tips that will improve supplier compliance and reduce risk.
1
2
3
Measure your current state of compliance and supplier risk exposure.
These survey results indicate supplier compliance and risk are often monitored
manually, or perhaps not at all. Considering how important it is, consider tools to help you holistically manage compliance and risk and find areas to improve. Great tools exist to help automate this process, so you don’t have to do this manually.
Embrace the future of supplier self-service tools.
Network-driven technology, similar to what we use to connect socially, is valuable for
keeping supplier information fresh. Allowing and encouraging suppliers to keep their own
information up to date on a network removes the burden from your team. Ensure that the tools you use can link supplier information to transactions (e.g., POs and invoices) and that they use 3rd party data to enrich and validate supplier data.
Tradeshift is a cloud based platform that connects buyers and suppliers, to transform the way they buy, pay, and work together. Tradeshift connects 500,000 companies across 190 countries.
Tradeshift® Risk is an innovative, all-encompassing way to always have access to accurate supplier information and use it to improve supplier compliance and mitigate risk.
For more information visit: tradeshift.com/solutions/risk
or contact [email protected]
