In this episode, Kala Dikibo speaks with James Meads, host of the Procuretech Podcast, about Vendor Data Management, his new procurementsoftware.site project, and the use of Supplier Information Management (SIM) software to improve an organization’s management of their supplier data.
Other points covered in today’s episode include:
- The problems with manual Vendor Data Management
- A view into the different services provided by SIM solutions
- Finding a solution with cyber security in mind
- Maintaining the quality of data
- Elements to consider from the perspective of your vendors
- Provider flexibility
Procurementsoftware.site is a free directory that allows companies to find a wide range of technology and software solutions for their procurement processes based on their own criteria, with more than 50 different categories to choose from.
One key aspect of the procurement industry is knowing your vendors. After all your vendors, and your relationship with them, form a crucial component of your business and brand. Even so, we can say from experience that many procurement leaders have a limited view of their own supply chain. That lack of visibility can lead to vendor issues and unexplored potential.
That’s why in this article, we’ll go over the meaning of vendor data management, its importance, and the tools that you can use to make it a much simpler job.
What Is Vendor Master Data Management?
At the most basic Vendor Master Data Management, also known as MDM, is about ensuring you have the right information about your vendor. That means updated records on the goods and services they provide, contract and purchasing records, and any other important information that is relevant to your business relationship.
It could be something as simple as having the right email account to communicate, or a valid bank account number to pay them. You want to do your due diligence not only to ensure your vendor gets their due but also that you don’t have issues with fraud.
This in turn helps foster better relationships with your vendor, improves the efficiency of your processes, and gives you more time and resources to work on your supplier relationship management tactics. The quality of your vendor data is what allows you to make the right decisions.
The Struggle with MDM
Given how important this is, you’d think it would be a top priority for the top brass. However, the Wall Street Journal reported that 65% of leaders in the procurement industry have little to no visibility of their data. This leads to them struggling to keep up with those that do.
Some of the reasons why include:
- Thinking that managing their data would require too much money and time
- Not having proper data management policies in place
- Not using digital tools to manage their data
A good fix to this issue is using the right tools for the job. In the case of Master Data Management, that would be using a Supplier Information Management (SIM) tool.
Advantages of Using a Supplier Information Management Solution for MDM
Having complete and updated records opens up a world of possibilities for you, and that’s much easier when you use digital tools instead of manually changing your records. By using an SIM platform, you would benefit through:
- Complete visibility over your vendor, which makes your relationship stronger and more efficient.
- A better understanding of your supply chain
- Access to updated vendor data that allows you to make informed decisions
These tools allow your vendors to update their data on their own, reducing the amount of resources you need to dedicate to that and ensuring the information is as accurate as it can be.
What options do I have?
The level of sophistication and features you’ll get will depend on how much you want to spend. There are lower-end options that work on a license basis that are perfectly functional, if not feature intensive. You’ll have to shop around and do your research to find a software supplier that fits your needs.
Some of the features you can find in SIM solutions include:
- Centralizing your data records and eliminating duplicates
- Verifying the records of the vendor, including their certificates and financial stability
- Remind you of upcoming contract renewal dates
And that’s just the tip of the iceberg.
Managing your vendor data is an important aspect of your relationship. However, doing it by hand is not really an effective solution, which is you should look into the different SIM options in the market to find one that fits your needs. Here at Procurement Express, we give you the knowledge and tools you need to effectively craft your MDM policies.