Your supplier diversity systems and processes are only as good as the data on which they are built, so when that data is inaccurate or redundant, those same systems and processes suffer. Bad data leads to wasted time, unnecessary expenses, supply chain disruption and lack of awareness of risk factors. Industry best practices advise data cleansing and data enrichment once a quarter to ensure quality, up-to-date data.
Data Enrichment services improve data accuracy and quality by gathering missing or incomplete information, shedding visibility into your current utilization of diverse suppliers, and identifying your top suppliers to reduce dependencies.
Bad data wastes time and resources
On average, about 30% of your data churns over the course of a year. Over time supplier company information becomes out of date. Suppliers move, merge, change ownership, change names and locations – all of these changes impact the accuracy of your data which in turn can cause processing errors or even supply chain disruption.
Consider the company that moves to a new location. The purchasing system has one location address while the accounts payable system has another, causing delayed invoice processing, rework to correct the error, and sometimes even duplicate payments. Multiply that by the dozens or even hundreds of suppliers in your supply chain over time, and you begin to see the real cost of bad data.
Data redundancy is another stealthy thief of time and resources. Duplicate suppliers and misclassified locations cause rework, wasted time and resources. Manually auditing each supplier is cost prohibitive, and cost one of our customers $20 to audit each of its suppliers. Data enrichment helped remove around 10,000 duplicate records, resulting in around $200,000 in savings. A Data Scrub can automate the process in a fraction of the time, identifying duplicate suppliers as well as providing normalization and standardization of vendor information.
Use accurate data to build a robust supplier diversity program
Grow your supplier diversity program with vendors already in your supply chain. Data Enrichment services identify diverse suppliers within your existing supplier base and delivers a detailed report of your current utilization, providing visibility into ownership and minority type and allowing you to establish your current baseline of diverse suppliers. Additionally, the report provides record counts and spend by diversity categories, enabling you to reduce supplier dependency by diversifying your supplier base.
Verifying the certification status of your diverse suppliers is crucial to the success of your supplier diversity program. Ownership changes can affect a firm's minority status, leaving you with a decrease in diversity spend, if you catch it. More importantly, it can have a major negative impact on your reporting of diverse suppliers if it isn’t updated. Using a robust database with access to aggregated data from third-party certification sources, a data enrichment program will automate the verification process and provide you with accurate, up-to-date information about your diverse suppliers' minority certification status.
Correctly grouping and categorizing suppliers by family and categories is required for accurate spend analysis and strategic sourcing. A data enrichment service aids you in monitoring merger and acquisition activity, ownership and diversity status changes. Using our own customer base as an example, we have been able to identify $800 million in miscoded spend. And even more significantly, we have identified $2.3 billion in new supplier diversity spend by identifying and correctly categorizing suppliers.
Mitigate risks with reliable data
An effective data enrichment program helps your organization identify and mitigate potential risks before they become a problem.
Dependency can lead to supply chain disruption without required and accurate supplier data. Reduce supplier risk and maintain the integrity of your diverse spend by actively monitoring merger and acquisition activity, ownership changes and updates to certification or classification status.
Bad data leads to inefficiencies, supplier dependencies and inaccurate reporting. Data enrichment saves your company time and money by ensuring that you are working with accurate, quality data to consolidate redundant information, identify diverse spend baselines and easily track the growth of your supplier diversity program.