Supplier Management Trends in 2013: Trend 4 – Actionable Intelligence through 3rd Party Data Collection
As data continues to explode in the realm of business, organizations will more frequently need to manage suppliers by augmenting their internally-generated information with information provided by hundreds of potential external sources. This additional information certainly is beneficial in offering various insights, such as potential red flags on credit risk, fraud, legal challenges and regulatory compliance – all areas where basic supplier profiles and internally generated information alone fall short. But is there actionable intelligence with this approach?
Given the number of initiatives within supplier management (from compliance and diversity, through to performance and risk), the trend towards leveraging third-party information will become more critical for helping drive decisions and monitoring supplier behavior. It will also likely increase in its importance, as organizational supply bases continue to change through business realignments based on increased corporate change – merger and acquisition, divestiture activity, or even global expansion within the coming year (discussed in an earlier post, Managing the Shifts in Corporate Activity).
However, the caveat in the form a of a famous Police song – “Too Much Information” comes to mind when considering the idea of collecting more information than what individuals can actually make sense of or use. As a prophetic song, it portends supplier management’s critical need to promote “actionable intelligence”. In other words, how you organize information and facilitate its collection is as important as the decision of what to collect. Deciding on a supplier data collection approach carries with it many dimensions that need to be considered. Due to the different tasks that have to be performed, from on-boarding to daily management and validation of suppliers, external content is often needed to establish that holistic view of your supply base.
In this age of Google Play and iTunes – on-demand is the way to do it. For instance, when is the last time you went out to buy a CD when all you really wanted is one or two tracks? Or think of a cable or satellite provider with the invention “On-Demand” movies? What this means for supplier management is taking advantage of the deluge of third party data by breaking it down into more digestible segments or components. This also means not turning on the “fire hose” for supplier information, but served up when needed.
Moreover , as part of the maturity or hype cycle famous by Gartner, the trend towards the extension of third party supplier data collection will be most successful through a Business Process-as-a-Service (BPaaS) approach at this stage in the game. For instance, as part of our new offering, HICX Solutions provides our Supplier Management software, combined with an expert staff of supplier management consultants for enabling organizations to retrieve, validate and update critical supplier information. This allows organizations to close supplier information gaps without impacting current processes or systems. The approach is also focused on segmenting suppliers based on priority (Tier1, Tier2, etc) that prevents organizations in “boiling the ocean” when collecting data on suppliers..
An example of this offering is also described in the illustration below – where solution/service it is divided into three distinct components – Data Form Collection/Validation (IRS Forms), Notification & Alerts, and Data Validation & Enhancement. From our perspective, BPaaS is grounded in an “actionable intelligence” approach for handling supplier alerting, data collection and identity management.
Furthermore, collecting data using a professional services forms enables information retrieval and validation without impacting or having to invest in additional systems. So in summary, applying an actionable intelligence approach to third party data collection helps:
- Address supplier management needs due to a lack of resources internally for collecting data
- Retrieve critical third party information on suppliers missing within existing systems
- Adds value without the additional cost of software development or acquisition
Our next segment on supplier management trends in 2013, will address the rise of enterprise “Centers of Excellence”, and what this means to supplier management.