Vendor Data Management for Optimal Procurement Performance
Effective vendor data management is foundational to an efficient procurement process. It drives savings through strategic sourcing, vendor discounts, efficient cash flow management, and increases customer satisfaction. By proactively managing vendors, an organization can better utilize financial resources, help ensure regulatory compliance, and drive critical improvements to the procurement process. Vendor management can also support key business metrics, contract terms adherence, and improve business reporting, which leads to better overall decision-making.
In contrast, poor vendor management can negatively impact an organization’s growth and pause innovation. Vendor data management can sometimes be an afterthought that, if not well integrated into the larger procurement lifecycle, has the potential to drive several sub-optimal outcomes. Negative outcomes can be a multitude of things such as inconsistent business processes, loss of revenue, poor vendor relationships, and regulatory risks. This blog discusses four steps for effective vendor management: assess, sterilize, stabilize, and optimize.
Four Steps for Effective Vendor Management
The first step, Assess, is the process of evaluating the current state of the data management process and the associated needs. This step is pivotal as it allows the institution to understand the existing challenges that will need resolution.
The second step, Sterilize, focuses on eliminating duplication, identifying missing data, correcting invalid data, deleting inactive or obsolete accounts, and creating new rules for the process. Sterilization is one of the most time-consuming steps of the process as it is the most granular examination of the data and requires the most “corrective” action.
The third step, Stabilize, consists of outlining the standards, completing the vendor profiles, and documenting duties both in and out of the vendor management system. Stabilization establishes a standard and consistent procedure and implements rules that will continue the sustainment of the improved process.
Finally, the fourth step, Optimize, focuses on vendor self-service, mitigating fraud and risks, and an ongoing process for validating data. Optimization is the culmination of the three previous steps, and ensures the process is working at an optimal level.
Achieving Lasting Results
As with many procurement procedures, vendor data management typically requires multiple departments and stakeholders to effectively collaborate to ensure an efficient process. Since vendor data is not static, simply assessing and sterilizing vendor records will not position an institution to achieve long-term effective results. It is critical to ensure that the appropriate policies and procedures are in place, fully adopted via effective change management, and updated as business needs evolve. Ensuring that vendor data is vigorously managed will position the institution to leverage data trends to effectively monitor activities such as prediction of fraud and strategic sourcing strategies.
As a sub-set of these activities, institutions must also work to ensure that the various procurement systems that depend on vendor data are also considered during these activities. Institutions should be mindful that vendor data management is ongoing. Once the four steps listed above have been completed, institutions must continuously employ strategies to analyze the data and ensure efficiencies.
Attain Partners has successfully worked with institutions across the United States to improve procurement procedures and streamline vendor data management. For more information or to speak with one of our experts, please contact us here.
About the Authors
Melany Barrett is a Senior Consultant in the Management Consulting practice of Attain Partners. With over 8 years of experience in Higher Education, she has a demonstrated knowledge in business process improvement, project management, research administration, and faculty affairs administration. Prior to Attain Partners, Ms. Barrett supported Higher Education administration and strategic initiatives as a member of an internal consulting team. She is a Prosci® Certified Change Management Practitioner with knowledge and training in the field and holds an MBA from the Georgetown University’s McDonough School of Business.
Alexandria Fleming is a Senior Consultant at Attain Partners specializing in change management. She has several years of experience doing change management work and technology implementations. Alexandria is originally from the west coast and enjoys international travel.
Jessica Lee is an Analyst at Attain Partners with prior experience in recruiting services. She is currently supporting both organizational change and project management efforts for Higher Education Clients and is a Prosci® Certified Change Management Practitioner. Jessica brings with her a strong attention to detail and is committed to achieving best results.
Diane Scott is a Senior Consultant at Attain Partners and possesses over twelve years of experience supporting Higher Education. She is a process improvement professional with a demonstrated history of management consulting and client relationship management. Her detailed understanding of university business helps her support client needs related to strategy, business process improvement, and change management. She holds an MBA from the Georgetown-McDonough School of Business, is a certified research administrator (CRA), and is a Prosci® Certified Change Management Practitioner.