SIG Dispatch: Supplier Master Data Management on Steroids or ‘I Want to Pump Your ERP Up’

Vendor case studies at procurement conferences have a habit of all blending together and sounding the same. But yesterday, a large global manufacturer (that will go unnamed until we get permission) got up on stage and presented a long chapter from its procurement technology transformation effort and specifically, in detail, how vendor file/master data management (MDM) tied into it.

The organization, which has grown both organically and through acquisition, has multiple ERP systems and “at least seven” different instances of SAP. Supplier master data was managed in a decentralized manner across its four global operation regions: North America, Europe, the Middle East and Africa (EMEA), Latin America and Asia. Each of these areas had independent “data stewards” who were responsible for keeping supplier data up to date.

I’ll save the full “prior state” story and the technology selection process in choosing a specific MDM solution (actually part of a best-of-breed source-to-pay suite) for a more detailed case study in the future — the selection process was so complex it took a year. Yet the organization ended up adopting a single solution to tackle both data management/integrity (vendor master maintenance, as they call it) as well as front-end procurement business applications including contract management, e-sourcing, e-procurement (or procure-to-pay), spend analysis and tool/asset tracking. Suppliers interface with the organization (in all of these areas) through a single supplier portal.

The miracle of the story is not just that the decentralized ERP systems and instances are now getting real-time vendor file updates based on both supplier-updated information as well as information updated by internal data stewards (where self-service is not an option), but also that the master data is feeding all of the front-end procurement applications as well — not to mention other applications tied to ERP outside of core SAP ECC.

From a business case perspective, the organization has realized significant improvement in a range of areas thanks to current and updated supplier/vendor master data. Benefits include improved global reporting, eliminating duplicate vendors, avoiding double invoices and payments, enhancing audit support, mapped parent/child relationships and enabling overall global visibility into accurate data throughout all procurement, supply chain and finance supplier touch points.  

We might call this supplier/vendor file MDM on steroids. But with apologies to Arnold, this is far more than just “pumping your ERP up.” This is about injecting significant business and procurement value contribution overall through something as simple (and difficult) as accurate vendor/supplier master data!

Stay tuned for further coverage from SIG throughout the day.

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