Enriching your supplier data is a process designed to transform raw information into supplier intelligence. In many cases, your supplier data becomes quickly becomes outdated, which invariably skews the true nature of your supplier relationships. Supplier data is constantly in flux, and your goal through data enrichment is to enable the professionals in your procurement organization to make actionable business decisions based on sound information.
Some of the business issues data enrichment can address include:
- Analyzing risk throughout your supply base.
- Anticipating potential future supplier behavior.
- Spotting potential disruptions to your supply chain.
- Rewarding high-performing suppliers with increased levels of engagement.
- Identifying potential problem suppliers.
- More accurately analyzing supplier spend and spend priorities.
- Better managing strategic sourcing programs.
- Gaining greater insight into supplier relationships.
- Segmenting supplier sales, including by industry and location.
- Creating analytics reporting to gain additional visibility into your procurement operations.
- Tracking compliance with your diversity and sustainability efforts.
Organizations can gain these business benefits by following a number of steps. Data enrichment allows you to achieve achieve transparency into your supplier diversity operations in order to make the best business decisions.
Here are three steps for securing data enrichment services:
Preparing the Ground
What do you hope to accomplish for the overall business by conducting a data enrichment project? Identifying the following are key business value drivers for embarking on a data enrichment project:
- Identify inaccurate data, and correct accordingly
- Identify a firmographic overview of your current supply base, including generalized business information.
- Identify the primary commodities or services your suppliers provide.
- Uncover additional value-add information about your suppliers, including ownership demographics and third-party certifications.
- Understand the risk dependency you may have on a subset of your supply base.
- Identify areas of supplier consolidation.
The Cleansing Process
You’ve prepared for the step of manipulating your raw supplier data by gathering all the pertinent information of your supplier relationships. Next, you and your data enrichment services solutions provider will undertake the key process of cleansing that raw data so information can be more easily transparent and accessible. In cleansing, you are looking to resolve some of the following:
- Data redundancy
- Duplicate records
- Inaccurate information
- Misclassified data
- Invalid information
All of the above shows up in the form of poor data quality. During the enrichment process, your provider will lead the way by comparing information against standard procurement industry master databases that contain public and private market information and industry codes. They will also provide aggregated certification information from a range of sources based on predetermined supplier attributes. Simply put, your provider compares your database against hundreds of master databases to correct any inaccuracies, remove redundancies, fill in blanks, and provide certification information.
Once your data is cleansed, the next step is to ensure its standardization. Think of standardization as a series of file folders. You want to ensure everything is placed in the right folder. Some of these folders may include:
- Company information, including company names, addresses, key contacts, number of employees.
- Financial information, including tax identifications, revenues.
- Corporate activities, such mergers and acquisitions, joint ventures and parent-child family linkages.
Now that your data is properly cleansed and standardized, you’ll work with your data enrichment solutions provider to best determine how to use and format this new, intelligent data to ensure enhanced transparency over your procurement operations. With it, you’ll have new-found confidence that you are utilizing accurate information that creates value for your business.
Data enrichment solutions are designed for your procurement department to have a proactive view of what is occurring with your supply base. Your enriched data will help you develop realistic performance goals and measures about your supplier base, as well as enable your procurement professionals to make the most appropriate decisions while reducing the potential for supplier risk.