April 15, 2014

Client Challenges in the Supplier Information Management (SIM) Space

Grant Watling recently joined HICX Solutions as a Principal over HICX’s Global Consulting Services. Previously a Principal Consultant at PRGX for Europe and Asia Pacific, Grant brings 10 years senior management consulting experience specializing in supplier data, P2P, master data management, and analytics – with responsibility for designing and delivering supplier master programs for large organizations across Europe, Asia Pacific and the Americas.

Here Grant shares his perspective on the Supplier Information Management (SIM) space, and what he sees as client challenges.

Grant:

What I have found are similarities across organizations, regardless of sector or region, below are three examples:

  1. Choice of ERP does not correspond with an ability to govern master data (just my opinion but I worked with data from all the major providers and many you may never have heard of).
  2. Single ERP instance (or multiple systems) does not correspond with SIM maturity.
  3. Ownership for master data falls between, and across, departments.

The difference between companies that ‘got it’ and those that struggled is the recognition that data is an asset and should be managed as such. This moment of epiphany brings a new paradigm around which organizations apply governance, clarity of roles and responsibilities, and ownership of quality by data creators, leading to value creation by data consumers. The age-old adage of “People, Process, and Technology” is fully applicable here. First, get your people aligned (what are you trying to achieve). Secondly, get your processes right. And, thirdly, adopt technology that will enable your people and processes.

Sounds simple right? Unfortunately… No.

Many technology platforms force organizations to adopt their pre-defined or ‘one size fits all’ processes, which, in turn, impacts process optimization, and ultimately people efficiency, as workarounds are introduced and system adoption suffers. I have been involved in system adoption programs, which carry the ‘remit to’ change people and process, but change to the system is so costly that it is out of scope. Such program restrictions consequently limit the change that is needed to make the difference originally intended.

Making the case for change, and applying a financial number for return on investment, leaves many organizations on the wayside. Unsure how to create a business case that can compete for funding means programs are often delayed from year to year.

Those that do secure funding to make a change can end up seeing their best intentions frustrated through poor execution. I have observed a trend in tackling ERP data quality that pushes an approach to extract, cleanse, enrich, and then return to the system. Often, what this leads to is risk, risk, and more risk! Risk that the underlying data becomes corrupt, risk that the wrong records are blocked, risk that enrichment from third party sources is out of date (or just plain wrong), risk that once a ‘clean’ file is created there is no robust way to return the data to the system. Ultimately, the risk created is disruption to the supply chain and/or stopping business operations in mid-flight.

One more, then I’ll wrap up. An underlying problem I have encountered is a bias towards the so-called ‘premier’ providers. I include the larger ERP and consultancies in this grouping. My critique is that clients will err on the side of caution rather than seek specialist solutions that may be more appropriate. The understandable comfort of selecting a ‘safe’ pair of hands is however sidestepping the responsibility to find the ‘right’ pair of hands.

In the words of Bob Dylan, “The Times They Are a-Changin’”. So, in closing, I offer three predictions for the future – and I look forward to sharing some more thoughts in future posts.

  • Prediction 1: Increased competition within Supplier Information Management (SIM) from multiple entrants (ERP’s, P2P, Software Providers, IT Consultancies, Big 4, Niche services, Data Brokers, etc.) – or at least in attempt.
  • Prediction 2: Market is becoming ready for complete solutions (not just product) that link with existing infrastructure investments, but which are mobile-enabled and, most importantly, flexible to change.
  • Prediction 3: Procurement’s involvement within the financial aspect of supply chains will increase, as will the need to evidence their impact on supplier innovation.
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by Costas Xyloyiannis

Chairman & CEO

With HICX since its formation in 2004, Konstantinos has been instrumental in building it into a leading Supply Base Management company. He is responsible for setting the company’s strategic direction as well as overseeing the growth and expansion, strategy, planning, execution and overall performance of the company.
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