Supplier Master Data Management is arguably the single most important enabler for Procurement to deliver cost efficiencies, increase its ROI as a function, and drive synergies across the organization. All transactional (Req-to-Pay, supplier ERP creation) and strategic processes/systems (spend analysis, eSourcing, eAuction, Contract Life Cycle Management, category management) use supplier master data. Procurement professionals spend a large portion of every day finding, collecting, harmonizing, enriching, and aggregating Supplier Master Data to the relevant transactional information.
At a basic level, supplier master data management seeks to ensure that an organization does not use multiple (potentially inconsistent) versions of the same supplier master data in different parts of its operations, which can occur in large and complex organizations. Moreover, Supplier Master Data Management has often been confused as an IT project. However, CPOs realize that a solution which drives good master data governance and data stewardship processes, deployed across the organization, will help them transform their procurement organization and boost productivity and collaboration.
The HICX Supplier Master Data Management module provides you:
- “Out of the box” data models, standards, and validations
- Integration with all downstream or upstream systems
- Easy consolidation, harmonization, enrichment, and publication of supplier master data
- Multiple language support
- Quick time to market
Poor data quality and inconsistent data standards for suppliers drive cost inefficiency across Procurement, Finance, and IT. Duplicated data and the inability to identify common suppliers upfront means time spent needlessly executing variants of the same process multiple times. This can cause costly payment errors and wasted effort in fixing problems associated with data errors. Strategic resources, both global and local, are equally ineffective in time is spent obtaining, harmonizing, and enriching supplier data and information, instead of identifying savings opportunities.
You should be concerned with:
- Internal resources needed to manage, reconcile, and enrich supplier data
- Time spent on internal alignment and manual data collection, harmonization, and enrichment
- Centralized common supplier processes and leverage shared service synergies
- Harmonized data standards and governance across multiple ERP and procurement systems
Cost reductions from supplier master data management also apply to IT functions, as duplication and redundancy increases the overall cost of data and systems. Common data standards and governance can significantly drive down operational costs. Organizations with a supplier master data management process and system are incurring considerably less cost and shorter timelines on ERP upgrades and harmonization projects.
Data Quality & Governance
Over the course of time, the expansion of global operations, global supply bases, product lines, and ERP systems complicate the process of maintaining reliable supplier master data. A large majority of organizations have to overcome these evolutionary barriers – if data standards are consistent, neither is data quality. Harmonizing ERP standards or consolidating systems can be an extremely costly exercise with a negative business impact on ROI.
You should be concerned with:
- Large volumes of poorly maintained and outdated supplier master data spread across disparate systems
- Lack of data governance across different ERP/system configurations, with different data fields, usages, and standards
- Inefficient and redundant transactional processes across sourcing and AP/RTP organizations
- Inability to centralize common supplier processes and leverage shared service synergies
Historically, supplier master data management has resided within the ERP ecosystem and was required to serve as not much more than an address for transacting basic business with a supplier. This notion has now changed as the procurement function has evolved, become global. As a large number of additional systems have sprouted to address growing procurement needs (eProcurement, eRFX, eAuctions, Contract Lifecycle Management, EDI hubs, etc.), organizations seek to drive more efficient processes through centralization. It is clear that poor data quality increases costs, hindering strategic procurement from fully leveraging an organization’s supply base and supplier information.
Addressing poor data quality requires organizational governance and processes as well as systems with the flexibility required for global commonality and visibility, yet still drive local transactional processes. Circumventing poor data quality by sending the data to external data enrichment providers is not a long-term strategy, as it will only allow the identification, not the harmonization, of common suppliers. Such a strategy cannot support transactional efficiencies. Organizations need to establish a clear upfront approach to ensure the quality of the data when a supplier is created, and when it is updated, to avoid the need for ongoing cleansing.
Provide Global Visibility
Fragmented and inconsistent supplier master data increases business complexity and limits integration across procurement and financial business systems and processes. Information needs to be available quickly to profit from the benefits of centralization. Yet as procurement functions are centralized, CPOs find that resources still struggle to find required information. Supplier master data is often locked up in ERPs or other procurement system silos, requiring knowledge of and access to various systems. Even if the supplier data is accessible, poor data quality coupled with a lack of a standard supplier IDs leads to a lack of confidence in decision making.
You should be concerned with:
- Lack of visibility across suppliers and supplier relationships
- Bringing together different elements of supplier information from disparate systems
- Building trust and fostering collaboration across procurement organizations
Supplier master data management can help build trust and credibility around an accurate view of organization-wide supplier information. Having such visibility will foster collaboration and synergies by providing a common basis for discussion, more value from an organization’s supply base, increasing cross-country and cross-business collaboration, and lowering overall cost and timelines.
Improve Procurement Function ROI
Improving the procurement function’s ROI and protecting the bottom line is a top priority for all CPOs as organizations look to centralize and share services. This presents significant challenges across transactional and strategic processes. Common processes and systems are necessary to have shared services for transactional processes. Without them, the shared service organization itself becomes highly inefficient, and operations suffer. For strategic category managers with global or cross-business mandates, visibility into supplier usage and relationships throughout the organization is vital. Without a trusted central repository with readily available and accurate data, time is spent on administrative and alignment activities rather than strategic ones.
You should be concerned with:
- Boosting productivity per procurement professional
- Inefficient and redundant transactional processes across sourcing and accounts payable/RTP organizations
- Time spent on data preparation (collect, harmonize, and enrich) rather than data analysis
- Improving strategic decision making and business agility
An accurate view of all supplier information across your organization can support organization-building trust and credibility. Such visibility will ultimately foster collaboration by providing a common basis for discussion, enabling organizations to derive more value from the supply base, increasing cross-country and cross-business collaboration, and lowering overall cost and timelines.
HICX’s platform is driven on establishing “a single version of the truth” by helping organizations extend the value of their investment in supply base initiatives. The ability to have a trusted and clean supplier master on an ongoing basis is vital to efficient supplier management programs. HICX Solutions offers the means to quickly get around these challenges and achieve operational efficiencies.
Our Supplier Master Data Management offering allows you to:
- Utilize an out-of-the-box supplier data model (with ability to add local fields during rollout), ready to use for centralized master data management
- Utilize out-of-the-box worldwide data standards and validations (e.g., address standards, tax numbers, bank accounts)
- Deploy with ready-to-use supplier lifecycle management and data stewardship workflows
- Easily integrate with all downstream ERP systems (SAP, Oracle, PeopleSoft, JD Edwards), upstream procurement systems (Ariba, Emptoris, Coupa), and Business Intelligence Systems (Cognos, Business Objects) – without the need to harmonize existing transactional systems
- Capture and feed transactional ERP fields
- Manage data across all supplier scenarios, such as manufacturers, agents, contractors, physicians, consultants, invoice address, shipping address, relationships, headquarters, and contracting address
- Easily consolidate, harmonize, enrich, and publish supplier master data
- Manage bank master data separately
- Support master data fields in multiple languages
- Deploy Supplier MDM within a few short months
Featured Case Study
A large European energy provider, with 10 ERP systems and 50,000+ suppliers, struggled with rationalizing their supplier master, causing redundant efforts and a lack of visibility. With HICX Solutions they were able to create a supplier master data management strategy by establishing a means to: centralize their supplier master, enrich their data, ensure compliance, and syndicate supplier information to the appropriate system as needed. Employing standard onboarding processes from a single point, they were able to recover over $165,000 in hard dollar savings, and identify an estimated $2,300,000 in sourcing savings.
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