Building a solid data foundation and ensuring data accuracy is key to building a sustainable and productive procurement function. And yet, many organizations push back on the need to invest in supplier data management tools.
Internal stakeholders such as the C-suite and leaders of other departments are often unable to see the need for digital transformation tools for procurement because they assume the methods of the past work well enough.
It’s up to procurement leaders to share examples of where and how those antiquated processes are failing and explain how breaking data silos and having accurate company-wide supplier and spend data can lead to strategic benefits for all.
Communicating the Benefits of Accurate Supplier and Spend Data
Communicate openly with stakeholders about the benefits of accurate data, focusing on how the benefits advantage the stakeholder’s interests.
Decrease Pay to Purchase Cycle Times
Finding, approving, and onboarding suppliers takes time. Updating that information when it changes increases the time from request to receipt of goods. Data accuracy decreases this cycle time by 90%, meaning stakeholders receive the products or services they need much more quickly.
Deliver Cost Savings
Having a company-wide understanding of where the money is going makes it possible to make strategic spend decisions to negotiate better pricing for every department. Consolidating contracts from multiple departments with a single supplier allows for better contract negotiation and bulk purchase discounts. Complete supplier data also allows for increased competition, resulting in further budget savings.
Increase Supplier Diversity
Knowing which existing suppliers have relevant diversity certifications allows you to see a clear picture of your diverse spend. This enables you to increase both tier one and tier two diverse spend and easily meet diversity program requirements.
Improve Risk Management
Having accurate information on which suppliers are inactive or have current or past sanctions allows for informed supplier selection and decreased company risk.
Partnering with Stakeholders
Invite stakeholders to share their ideas and partner with procurement to build a solid data foundation in a way that benefits their daily functions and the company bottom line.
Use Real-World Examples
Inaccurate supplier data causes delays in projects, unhappy clients, and even financial loss. When making a case for investment in data accuracy tools, use recent examples of where inaccurate data has caused problems and where accurate data has delivered benefits for your organization.
Skip the Jargon
Many commonly used words and acronyms exist within the procurement space, but professionals in other departments may be unaccustomed to these terms. Using general language rather than specialist terms empowers stakeholders to focus on the message you’re delivering rather than on trying to parse your meaning from unfamiliar phrases.
Focus on Strategy
Framing the need for data accuracy around strategic decision-making, departmental, and company-wide goals breaks down silos and builds opportunities for collaboration across the organization. Accurate data is impossible without collaboration.
When advocating for data accuracy, come to the table with identified tools and clear steps forward. Showcasing various options, their budget requirements, and concise explanations for the purpose and use of each opens the door for action and keeps the conversation from stalling at the hypothetical.
Clean data is necessary for organizations of the future to stay competitive. But getting clean and complete data requires collaboration and cross-company support, so procurement teams need to develop strong communication skills to educate internal stakeholders on how and why to build a solid data foundation.