In the previous article, Jon Hansen talked about the need for organizations to be digital-ready if they hope to achieve a maximum return from their S2P implementation. The biggest and most important first step towards this state of digital readiness is having clean data.
What is does it mean to have clean data, and why is it important.
Based on a September 2019 CIPS Supply Management article, having “clean data” means that an “organization’s spend and supply data is accurate and up to date.” While the explanation is simple enough, understanding what it is, and getting to the point of having clean data are two very different things.
The problem, which is a longstanding one according to Bank of America University Distinguished Professor of Supply Chain Management Dr. Robert Handfield, centers on not only how, but who? Specifically, who should take the lead in ensuring that an organization’s data is digital ready?
Before I answer these questions, I think it is important to explain “the why,” as in why clean data is important for S2P implementation success.
The Reasons Behind the “Why”
In a recent paper that Fluxym co-authored with the leading accounting and business advisory firm Grant Thornton titled What is the real impact of supplier data? we identified the following four key points:
1. Supplier data is a source of strategic value creation for companies, boosted by the growing rise in data volumes, the multiplication of regulatory requirements and risks, and the search for operational efficiency.
2. The quality of supplier data is an unavoidable prerequisite to meet the challenges faced by financial and Procurement departments.
3. Today, new solutions based on innovative technologies allow for the creation of a single, shared supplier repository. These propose an effective alternative to the “ERP only” approach.
4. The tools alone cannot guarantee perfect data quality. Awareness and support for stakeholders at all levels must also be implemented to create a “data” culture in the company.
Considering the above, the reasons (and importance) for having clean data are obvious.
What isn’t as obvious to many is the how and the whom.
Who’s at The Wheel?
Once again, I doubt that very many would offer an argument regarding why an organization’s spend and supply data need to be accurate and up to date.
The more immediate challenge is figuring out who should take the lead in overseeing the cleansing process.
While acknowledging the value of clean data, the former head of procurement for the Scottish government indicated that CPOs and their team do not have the cycles to facilitate, let alone oversee the exercise. She then went on to ask; “how much cleansing actually needs to be done to enable the analytics to work?”
In addressing the last query, the CIO for NASPO suggests that perhaps “a clean slate” approach may be an effective starting point. He then suggests using a filtering mechanism to assess the strategic importance of the data to determine if it warrants cleansing.
Of course, there are still those who believe that the best way to get to clean data is by abdicating responsibility to the S2P service provider. Handfield, as well as other industry experts, believe that this is the least viable strategy to pursue.
So, what is the answer?
Collaboration AND Implementation
A turnkey solution. An end-to-end S2P platform.
What is the one thing the above statements have in common? That’s right; they both promise simplicity and results through a “one shop, one-stop” engagement process.
Now I want to be clear; unlike the eProcurement functionality within the old ERP platforms, today’s digital solutions are more robust from both a technological and user standpoint.
With the former, enterprise-wide implementations would usually span several years, costing millions of dollars. Conversely, the cloud-based pay-by-the-drink digital solutions of today can be fully functional (within their core competency scope) in a matter of weeks, if not days.
However, and while there is a substantial reduction in timelines and costs, realizing an optimum result will only come through the use of a proven implementation methodology.
As illustrated in the graphic below, the methodology to which I am referring (our methodology) involves several stages starting with readiness through to “going live” in a production environment and the provision of on-going support.
What makes the above model unique is our role as expert “procurement and supply chain” facilitator. Think of us as being a “by procurement, for procurement” resource whose responsibility is to work collaboratively with you and your S2P service provider to manage the overall end-to-end implementation process – including data cleansing.
In future articles, I will share with you additional insights as well as case studies. Right now, I would like to invite you to download our paper; What is the real impact of supplier data?