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In this guest post, Procurement Leaders invites Lavante’s Tom Flynn to wax lyrical about why data quality is such a key challenge for procurement and suggest some approaches to a sophisticated data strategy.
I was recently reviewing some of my favorite articles and research papers from 2015 and I "re-stumbled" upon Deloitte research published in the Wall Street Journal entitled Tech Implementation Hurdles Constrain CPO’s. Within the first few lines of text the author states that CPOs are seeing data quality and system integration as the key hurdles that must be overcome before they can leverage advanced analytics or, one assumes, before they can maximize their investment in advanced transactional systems.
In fact, two-thirds of CPOs cited poor data quality and 40% cited poorly integrated systems as barriers to optimization.
Further along in the article the survey results also revealed that CPOs are focusing their IT investments on ’foundation building’. In particular, a staggering 65% of CPOs identified the development of a supplier portal as a key initiative for solving data quality and integration issues.
These trends track directly with what I have been observing in the marketplace for the last few years and the conversation has recently been heating up on the importance of data quality and the belief that a supplier portal can solve data and integration issues.
Prior to this current growing focus on data as the foundation of P2P, the market seemed to be answering the sirens’ call of wild ROI claims from SaaS-based solution (and platform) providers that focused on optimizing transactions. Many providers stepped forward with well-devised tools to support a number of initiatives, but the systems were only as good as: 1) the quality of data 2) the ease of data integration and 3) the percentage of suppliers that take part in initiatives.
In the last several months I’ve had opportunities to speak with many industry trendspotters.
Universally, I’ve heard that though many CPOs invested in sophisticated point solutions that promised steep ROI, they were routinely held back from achieving optimal levels of payback because of poor data quality as well as a lack of systems integration.
In the same conversations we also discussed the promise of supplier portals as the potential solution for driving data quality and integration (and for driving more supplier participation).
On paper, a supplier portal can solve all data and integration problems, but too many supplier portals in the market place can confuse and/or alienate suppliers. Added to that, not all supplier portals have the same ambition. In this blogger’s opinion, most supplier portals that popped up in the last few years were aimed at capturing and storing data that facilitates a limited transactional concept.
In short, software providers made SIM/Supplier portals to support their product and not to support a holistic enterprise-wide data solution. In truth, most of these solutions providers understand the limitations of their "portal" solution and like the vast majority of the CPOs in the Deloitte survey, they would prefer to have access to a complete supplier portal that: 1) ensures data quality 2) integrates easily between systems and 3) drives high compliance from suppliers.
A properly devised supplier portal will serve clients and suppliers as well as other solution providers. ROI will skyrocket all around.
So with the turn of the new year, the Deloitte research has confirmed what we have been discussing and thinking for awhile - companies are turning their focus to data quality and the integration of their data.
This is perhaps a bit overwhelming because fixing data quality is universally viewed as a daunting task and it’s hard to know where to start. But at the same time, this entire dialogue is exhilarating because this new strategy of focusing on data quality places the emphasis where it actually belongs - at the foundation of your P2P process.
If 2016 really becomes the year of data quality or if a true supplier portal emerges that helps to support suppliers; drives compliance; and integrates data across systems - then and only then will CPOs be in a position to leverage their advanced analytics or maximize their investment in point solutions.
Tom Flynn is co-founder and CMO at Lavante.
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.