In the first installment of this Procurement Information Architecture series, we discussed the importance of procurement developing a procurement information architecture (here) and also two of the major components: Analytics (here and here) and a Portal Infrastructure (here). In this next installment, we’ll now dive into the area of Master Data Management (MDM) and its importance to the overall procurement information management capability (Fig 1).
Figure 1 – Simplified Procurement Information Architecture
Defining MDM is Key to Better Management - And Getting Better Payback
MDM is fairly straightforward in principle. As Wikipedia defines it:
Master Data Management comprises a set of processes, governance, policies, standards and tools that consistently defines and manages the master data (i.e. non-transactional data entities) of an organization (which may include reference data).
For procurement, MDM is focused on supply related information, and obviously includes managing data about suppliers. Spend Matters has written extensively about Supplier Information Management (SIM), such as in the following research papers:
- Supplier Information Management Technology Fundamentals — Part One
- Supplier Information Management Technology Fundamentals — Part Two
- Beyond One-Off Initiatives and a Virtual Vendor Master
- Accurate Supplier Data Creates Savings for Pharmaceutical Shared Service
- Developing and Maintaining Accurate Supplier Data: Lessons from Personal Hygiene to Overcome Dirty Supplier Information in Finance and Procurement
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