The Supplier Experience and Data Quality Flywheel
Various market factors in the last couple of years, such as supply chain disruptions, cyber security breaches and increasing geopolitical instability have made organizations aware of the importance of good data. Lack of transparency and inadequate processes exacerbate these issues.
In a webinar on Putting the Supplier Experience at the Forefront of Strategic Procurement, Charlotte de Brabandt states that “Now more than ever before I think the impact and threat level has truly risen and became the number one risk factor right now within organizations – and also within our supply chain.
In times like those, organizations that had their data in order and up to date could reach out to their whole supplier base by sending one email and within one mass communication, could gain insight into and send out vital information. On the flip side, others were struggling with a huge data task based on the implications of not knowing who to contact and how to contact them. The difference that makes in the event of a crisis, and the impact it can have on an organization, is startling.
Enterprises need suppliers to provide them with more data than ever before in a growing range of areas. However, keeping that amount of supplier information up-to-date on an ongoing basis, so that it is ready in the case of an adverse event, is not an easy endeavor. Ultimately, companies are almost entirely reliant on their suppliers to provide them with relevant data and for the information to be available at the point of need. This is where the ‘supplier experience-supplier data’ flywheel comes into action.
Supplier Experience and Data Quality Flywheel
Costas Xyloyiannis, CEO of HICX, states “The philosophy here is that better experiences create better data and better data creates better experiences.”
The experience-data flywheel in action
In order for data to be kept up-to-date, every supplier has to be engaged with its customers as much as possible. If communications are difficult, multiple log-ins into different systems are required, or information is arduous to find, then suppliers are going to avoid any information sharing until a critical point is reached and that information becomes vital – and even then, it is likely to be limited to sharing only what is necessary to overcome a current bottleneck.
On the other hand, removing the complexity and friction that suppliers face when dealing with multiple systems and departments in your business and providing them with tools such as the ability to self-serve information that is unique and matters to them means that suppliers are enabled to efficiently accomplish what is needed and will return more often to update more information.
As Stephane Sacherer of Mondelez explains, “The supplier must go to the tool,” which he sees as being similar to a marketing campaign. “The objective is to have suppliers return, again and again. If this is not achieved, the data still becomes obsolete. Ways of encouraging this behavior include features such as invoice tracking and dashboards,” he adds.
Stephane reminds us that even small businesses need to keep their information up-to-date and that Mondelez “therefore has set objectives, such as targets for number of visits per year and number of suppliers logging in to the system. In order to drive this higher, ways are being identified for bringing more value to the portal, and to make it a one-stop shop,” he states.
In turn, this information can be used to segment suppliers and further refine and tailor the experience so that reasons for returning become more compelling or information provided to them can be more enriched.
This, specifically, is how the experience-data flywheel cycle operates. Over time, the whole system is data driven by the suppliers. If implemented successfully, these kinds of systems can enable supplier experience at scale, rather than for the select few, which is one goal of Supplier Experience Management and is wholly different from an approach that uses outdated tools and technology.
According to Costas, “Experiences these days are digital experiences, which we’re talking about. Simply put, the digital experience depends on excellent data and information to fuel it. And it also enables doing things at scale for the masses, rather than for the few. And also, doing it efficiently at scale.”
The future is reliant on good data
Due to the lack of good data, during 2020 companies were forced to onboard more suppliers than ever before in a short period of time, exposing themselves to even greater risk. With no process for ongoing data improvement already in place, they were caught off guard with existing bad data.
Fortunately, more and more organizations are starting to realize that without the foundation of good data quality, they are remaining stagnant, rather than advancing. This will become even more evident, not just due to growing risk factors, but also as organizations try to advance digitally through the use of new technologies such as AI and machine learning, whose backbone is good and accurate data – and for which Procurement has arguably the most exciting role as a function to play.
In a webinar on Elevating Supplier Experience, Amy Fong, Vice President at Everest Group, states, “In our Key Issues study this year, the most common barrier to digital transformation people listed – and I mean all functions, not just Procurement, we knew this was an issue with suppliers, but across the business, was lack of visibility and clean information. What we’re starting to realize is that as we try to transform our organizations digitally, if we don’t have good underlying information, we can’t advance.”
This article is based on Chapter 3, What Is the Supplier Experience and Data Quality Flywheel, of our Preparing for Supplier Experience Management whitepaper.