A closer look at the PayStream Advisors 2017 Supplier Management Report and webinar.
In a recent survey about current supplier management challenges, goals, and practices, PayStream Advisors asked procurement organizations what contributes to poor supplier relationships, and what their priorities are for improving the processes in place. Not surprisingly, access to accurate information was at the heart of both: As a source of supply chain challenges, and as a way to achieve a more strategic level of supplier management. Despite this seeming alignment between problem and solution, increased access to verified supplier information is not an end in and of itself. It is rather a means to two strategic ends: Satisfied internal stakeholders, and healthy supplier relationships.
Procurement may look at having control over supplier information as the key to building internal influence. But, stakeholders and suppliers are more interested in what Supplier Information Management (SIM) technology allows them to accomplish on their own, with minimal assistance. Therefore, procurement should always remember that, while the first step is to cleanse and centralize information, value is created as a result of the applications of a SIM platform – not just the mere existence of the information itself.
What affects the quality of your supplier relationships?
From procurement’s perspective, the top issues with supplier relationships are clearly tied to information management (Fig. 1). Looking at the combined data from all survey participants, the timing of responses to supplier problems and questions and poor supplier data management take the top spots. Both of these are tied to the availability or accessibility of information – precisely the problem SIM was designed to solve.
In fact, poor data management is tied with late payments as the second highest cause of poor supplier relationships. Whether procurement is in a position to address it or not, we know that late payments are likely to be the top cause of relationship problems on the supplier side. This serves as an indication of just how important actionable information is: handling it right is equal to getting paid on time.
© 2017 PayStream Advisors, Inc
What do you want to achieve via supplier management?
Suppliers are a tremendous source of innovation for companies. Making improvements to how they are managed can reduce risk, increase access to new capabilities, and position the company as a “customer of choice.” 40% of the survey respondents named “increased supply chain efficiency” as their goal for improved supplier management (Fig 2). Specifically mentioning the supply chain is notable because it extends beyond first-tier suppliers. Without having direct contact with an extended network of companies, procurement will be dependent on access to centralized information – once again positioning SIM as a critical asset.
© 2017 PayStream Advisors, Inc
Although the majority of respondents selected supply chain efficiency as their top objective, there is not a goal on this list that does not require increased access to supplier information. Supplier validation, supplier relationships, transparency, and response times are all brought within reach with a well-developed and maintained SIM platform.
Supplier information is your source of truth.
Whether you characterize your current scope as Procure-to-Pay (P2P) or Source-to-Settle (S2S), having a Supplier Information Management solution in place takes the organization’s capabilities far beyond simple access to a supplier network. Strategic SIM becomes the single source of truth for financial, legal, and business decisions: empowering suppliers to self-update and providing internal buyers with searchability and quick response times when there is a question.
The Determine webinar with PayStream Advisors based on the 2017 Supplier Management Report is called Strategic Supplier Relationships. In the on-demand video, the two companies explore the reasons behind the survey responses, and how supplier management technology solves for those challenges. Using industry verticals, the issues raised in the survey are broken down to show just how addressable they are with shared data – supplier information – on a cloud platform.
Supplier Management, and how best to leverage it using combined and integrated Contract Management and other solutions, is a topic that is covered in an extensive library of resources, or schedule a personalized demonstration of the Determine Cloud Platform.