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The negative impacts of the spaghetti architecture in Supplier Management

, by Thierry Jaffry

Most companies are struggling to maintain and update supplier data, leading to financial and performance impacts.

1 – Multiple systems create chaos

Because of multiple systems (and we don’t only see that in companies with external growth), the supplier creation process is complex, with many different entry points, and various contributors.

Moreover, many users from various departments may have access to the data, creating and updating suppliers data without any process or control. Unicity check, in such a context, is also quite impossible.

This generates duplicates, inaccurate data and risk exposition. But sometimes, because of the company history/context or investment capacity, it is not easy to start a “One ERP for all” project. Then it’s time to invest in a SIM middleware to bring back supplier management under control.

2 – Team (un)productivity

Fragmented data over multiple systems kills global efficiency. A spaghetti architecture implies a labyrinth synchronization between softwares, sometimes requiring buyers and AP clerks to manually update supplier data in different systems. This duplication of tasks means  hours of unproductive work, and less focus on strategic added value tasks. According to AMR Research, employees spend eight times more energy on managing supplier relationships in companies equipped with a SIM (Supplier Information Management).

The spaghetti architecture

3 – Maintenance Costs

A complex system architecture means costs – whether it’s SAAS or On-premise model. IT departments face challenges every day in maintaining the consistency of data flows between ERPs, BI tools, eSourcing suites and P2P solutions (and we’re only focusing here on supplier/buying side): they have to deal with referentials synchronization, technical issues and conflicts, data mapping, real time interfaces and nightly batches everywhere. Also, as complex integration are built, changing a system configuration requires a deep impact analysis.

Centralizing supplier data in a SIM solution will clarify the architecture and help reducing the number of systems (or optimizing their usage), thus reducing the costs of the global IT architecture.

Conclusion :

As more and more enterprise processes are digitalized through specific solutions, most IT departments need to manage multiple systems (including Saas and On Premises) and associated integration flows. These complex architectures lead to data corruption.

It is now a priority to streamline the data management process and set-up governance. Otherwise, Procurement & Finance (and the whole company) will be exposed to risks, fraud, extra costs and unproductivity.

Do you need help to fix your spaghetti infrastructure?