Many terms are bandied about in supplier diversity, yet one that is as important as any other is “data enrichment.”
Seems easy enough to understand – take the data you have available on your suppliers and deepen it for its true intelligence value. With supplier data constantly in flux, you can’t afford inaccurate and outdated information on your supply base. Procurement decisions are business decisions, and having insight into your data will empower your organization to be confident it is making the right choices with suppliers. Data enrichment lets you easily track the growth of your supplier diversity program.
So what’s the process for enriching your supplier data? Here are five steps that will occur in the goal of data enrichment:
Identifying Your Suppliers
The first step in the process is understanding your current utilization of diverse suppliers within your existing supply base as supplier company information becomes outdated over time, leading to processing and other errors. In fact, before deploying supplier portals and other projects, your organizations must be assured that the data is correct. Identifying your suppliers provides visibility into the ownership and minority type of suppliers and allows you to identify your top suppliers by spend.
Cleansing Your Data
Once you’ve identified your supplier data, the next step is cleansing that data to enhance data accuracy and quality and eliminate data redundancy. Showing duplicate suppliers and misclassified locations can lead to wasted time and resources for your organization, driving up unnecessary costs. The process of cleaning data starts with comparing your supplier files against master databases containing public and private sources of market information in order to develop standardizations in areas such as company names, addresses, contact information, telephone numbers, tax identifications, revenues, number of employees, etc. You may also identify other activities involving your suppliers, such as mergers and acquisitions and ownership changes. Cleansing data appends the updated and accurate information to the supplier file to support your decision making.
Once your supplier data is rendered accurate, your enrichment efforts will provide such benefits as spend by diversity category and classification by certifying organizations to include certification expiration dates and certificate numbers. Classified by diversity categories such as: MBE, WBE, LGBT, SDB, 8(a), HUBZone, Veteran, Service-Disabled Veteran, and small-business suppliers, will allows you to search, track and report on suppliers based. For instance, you’ll easily be able to identify your top 10 categories ranked by spend, record count or geographic region.
As your data is enriched, you now truly know who your suppliers are. You have created a clean vendor master list, and your company can break down and prioritize its supplier efforts. You are able to integrate this informative supplier and spend data into your company’s advanced analytics, reporting and spend management programs to improve your ability to track supplier diversity and compliance through more insightful analysis of your overall sourcing programs. Enrichment results are able to be easily sorted and filtered and shared throughout your organization.
The final step is achieving the ability to gauge success through your enriched data by developing realistic performance goals and measures. Possessing clean data gives you that opportunity. For instance, you can easily track the growth of your supplier diversity program and the increase of your organization’s diverse utilization through continuous supplier data enrichment projects, enabling your professionals to make actionable decisions and measure against them. You also remain in tune with your diverse suppliers by automatically enriching your supplier list quarterly and receiving updates on newly certified suppliers, expired certificates and renewals, etc.
One certainty about supplier data is that it is constantly changing. So to mitigate supplier risk while ensuring the integrity of your diverse spend efforts, can you afford not to operate with clean data? You can’t. The benefit of visibility into your global supplier network is too important to ignore.