Exploring the Supplier Management Market: The Basics of Master Data Management

A central component of supplier management (not to mention spend analysis and broader procurement analytics) is master data management, or simply MDM for short. There are numerous approaches to MDM for supplier data. One approach is the creation of a true “master” record that updates both source and other systems with correct information on supplier vendor master and enrichment details while serving as the actual system of record itself. Another, virtualized approach would sit on top of other systems and keep them in sync with the latest data.

As noted in our recently published Spend Matters PRO research brief, Supplier Management Forecast: 2014 Market Growth, Analysis, and Predictions, MDM “is distinctly different from but highly complementary to supplier lifecycle management. An MDM activity is focused on pulling together all the structured data from all the ERP and similar solutions you already have in operational use across the broader enterprise – in other words, inward-focused. The activity involves various IT underpinnings around setting up software connections, mapping data schema, de-duplicating records, and otherwise cleaning up the data to give you a clean set of supplier data across your business areas.”

In other words, procurement and supplier MDM:

  • Complements a range of existing supplier management and spend analytics initiatives
  • Can be heavily integrated over time with broader analytics and data management programs included but not limited to tier-one supplier data
  • An essential procurement resource when leveraged in combination with historical spend

There are numerous ways to quantify the business case for procurement and supplier MDM. Yet the landscape of vendor approaches and offerings is different and potentially confusing. We encourage our readers – even non-Oracle shops – to check out Oracle’s capabilities and customer use cases in this area as they are among the furthest along in terms of sales and customer traction in the procurement and supplier MDM market.

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