Did you know that every year approximately one-third of supplier data become outdated? That's disheartening news if you're still spending hours and hours manually entering and verifying supplier data. Manually adding and verifying supplier information is time-consuming and costly. Unfortunately, because we are human, manual data preparation is also a guaranteed path to data inaccuracy.
Even if you have a data enrichment service, if you don't implement a regular “clean and enrich” initiative, you could be working with outdated, inaccurate data. That could cause your business lost revenue, non-compliance penalties, supply chain disruption, and more.
How do bad data affect you?
Incomplete or outdated supplier data can result in poor business decisions. Analytic-oriented failures (i.e. descriptive, predictive, and prescriptive analytics models or reports) can be directly linked to the quality of data. Suppose your organization is considering a new product line. As part of the business plan, a model is created predicting supply and demand based on master supplier data. If those data are inaccurate, the model may appear viable but is actually worthless.
Ownership changes, mergers, and updates to certification status can negatively impact your supplier diversity program. Consider a Tier 1 supplier to a major corporation. To meet the client's supplier diversity requirements, the Tier 1 reports diverse spend with Tier 2 suppliers. Without regular data enrichment, the Tier 1 is working with outdated certification information, possibly incorrectly reporting diverse spend, and risks the loss of contracts or goodwill with both the client and the community.
As suppliers are added to the master database, duplications and redundancies occur. Duplicated data and the inability to identify common suppliers up front means time spent needlessly repeating tasks. Parent–child family linkages are missed, leading to overreliance on a single supplier. If that supplier is unable to meet your organization's demand, supply chain disruption occurs, leading to lost revenue and unhappy customers.
Don't become a casualty of bad data
To halt the perpetuation of bad data across the enterprise, “clean and enrich” initiatives are the most effective. A data enrichment program that uses robust, constantly updated databases is critical to the health of your supplier data.
Remember, your data enrichment initiative is only as good as the database you use. Choose a company with a comprehensive database that employs both public and private sources to aggregate data. When you use a quality database, you can be confident in the results of your enrichment.
But one-time data enrichment isn't enough.
A substantial amount of of supplier data become outdated each year. Ongoing testing and monitoring are critical to maintaining the quality of data that your organization needs in order to succeed. The frequency with which you clean your data depends on your individual business. Larger businesses collect data at a much faster rate and should clean their data more regularly than small businesses.
Data enrichment gathers missing or incomplete data and fills in the blanks, identifies duplicate suppliers as well as parent–child supplier relationships, and standardizes names and categories. All of these processes mitigate risks to your supplier diversity program, your supply chain, and your business as a whole.
Mitigating risk is the most urgent benefit of regular data enrichment, but quality data also support the growth and success of your supplier diversity program. An accurate view of diverse supplier information across your organization builds trust and credibility. When procurement and buying teams across the enterprise are confident in the information available, identifying potential diverse suppliers and presenting opportunities become so much easier. When reports are created from enriched data, stakeholders are more likely to embrace and support your supplier diversity program.
Your successful supplier diversity program requires accurate, relevant data to ensure not only the integrity of reporting but the strength and quality of the program. Regular data cleansing and enrichment are the keys to your success.