In Part 1 of this post, we discussed some of the challenges of Supplier Information Management (SIM) as a procurement application market. One of the main issues is that while SIM includes the management of many ‘core processes’ of maintaining the supplier master data (e.g., the add/change/delete process of the vendor master file – unfortunately usually buried in Accounts Payable for the purpose of paying the supplier), it is also the management processes embedded within other processes. The management of this supplier information (i.e., “Supplier Information Management”) doesn't create an application market that somehow supersedes the core process-centric applications in sourcing, P2P, supplier performance management, etc., even if you try to broaden it to SxM and throw in Supplier Performance Management, Supplier Risk/Compliance Management, and some walk-up self-service registration functionality.
Since the dawn of IT, data management and process management are two sides of the same coin – and the data management piece is just as critical and process-centric applications. As we have written before, an MDM capability such as that expressed by “SIM”-focused vendors is an absolute must-have for large enterprises because the complexity and sophistication of the data models and data environment will always outpace the ability of ERP vendors to adapt their data models – even though over time they will increasingly become the de facto system of record.
SIM is not just Supplier MDM, because information management, and knowledge management is much more than just the technically driven master data integration platforms driven by IT. True SIM is much more advanced. If you are going to think about “Big Data,” you have to think about a much larger definition of supplier-related (and inbound supply network) information and its role in content management, market intelligence, analytics, etc. In our PRO piece on MDM’s evolving role in a sophisticated Procurement IT Architecture, we outline the elements of next-generation procurement MDM, its value, and some detailed guidance to practitioners on how to best manage it.
The importance of a strong SIM capability can’t be stated strongly enough, and we feel there is a key role to play for best-of-breed SIM platforms. They, combined with analytics (where they very much need to build out their capabilities if they are to survive and thrive), are the ultimate “composite applications” in procurement that can improve workflow/transactional processes and systems (the “systems of process”) – as well as analytic processes and systems (the “systems of decision”).
So, are we praising the providers who can provide this platform – or are we burying them? It depends on how well they can rise up to the challenge and take a leadership position here.
As always, we’d love to hear your thoughts on this. Leave a comment!