As last year wrapped up we were fortunate to work with PayStream Advisors on research that they were doing to help further explore and define the Supplier Information Management (SIM) market. The document they have produced, “The Power of Supplier Information Management Technology” explores the complex requirements of managing supplier data. The paper serves as both an educational guide on “what is SIM?” and as a step-by-step guide on how to select a SIM solution that will work for you. With a new year beginning we felt like it is a good idea to shine a new light on their research and re-engage the conversation they started just before the holiday break. Kudos to the Paystream research team – and to the document’s author Anna Barnett, in particular – for providing a complete but very accessible exploration of an otherwise complicated topic. I am providing Barnett’s introduction to the research project below and encouraging any and all readers of this blog to follow the link and read the entire document.
From the white paper:
Managing suppliers is a very complex process for any organization, especially as globalization increases, governmental oversights continue to expand, and supply chains grow more diverse. To handle supplier data across these multi-level environments, a company must be able to collect and maintain unique information for thousands of suppliers, while also staying legally and organizationally compliant and protecting its assets. This entails countless hours on-boarding and screening suppliers, collecting tax and legal documents, assessing supplier risk, and ensuring that all submitted information is updated consistently.
Ineffective supplier management opens the door to a lot of risks—not only could a company potentially onboard a fraudulent supplier, it could also miss vital on-boarding requirements such as the collection of disaster recovery plans, sustainability plans, and insurance certificates. Companies will also miss details necessary for fully-enriched supplier data, like purchasing categories, cost centers, and industry coding. Inefficient data management often also leads to low supplier adoption of an organization’s existing Procure-to-Pay (P2P) software solutions. Low supplier participation in P2P automation initiatives (e.g., dynamic discounting, e-Invoicing, contract management) can potentially cost an enterprise millions of dollars in savings. In all, poorly-managed supplier information results in missed enhancement opportunities, profit loss, and exposure to elevated risk and/or legal consequences.
Today, organizations are realizing that in order to gain control of their supplier data, they must turn to technology. Many try to refashion their existing ERP system to accommodate their supplier management needs—they hire consulting firms, create management and IT development plans, and spend years attempting to force-fit their requirements into the ERP. However, these systems were not built to effectively manage such complex and sensitive information, as they are primarily intended to support transaction processing. Trying to transform a bulky system into a data communication and collection engine is not a strategic or financially responsible decision.
In order to truly secure and control supplier data, organizations must leverage a system with multiple modes of outbound communication capability. This system is found in cloud-based supplier information management (SIM) software, a technology solely designed to optimize supplier data. SIM software retrieves, organizes, and manages supplier information while ensuring minimum risk and high efficiency—all across a global supplier base… Read More