Is the Vendor "Single Source of Truth" Concept Obsolete?

I’m trying something different tonight…

Every Sunday night, after the kids are tucked in, I take a moment to review the week behind us and plan the week ahead. This 30-60 min period is very small in the grand scheme of things but it has had an outsized positive impact on all aspects of my life.

I thought I would invite you into this process going forward by sending you a Sunday Night Note. In it, you will find:

• The best Digital Procurement “nugget” from the past week (from conversations with my clients, LinkedIn or from writing I’m working on…)

• A few personal thoughts

• The “Quote of the Week” → I can’t get enough of good quotes…

Hopefully, this will ignite continuous improvement ideas to help you get the most out of your Procurement processes and systems at work. A good work life certainly helps make life good overall… So, it’s worth improving!

Otherwise, the Monthly Top 5 Source-to-Pay article “round-up” (last day of every month) and paid deep dive articles (15th of every month) continue on unchanged. In fact, there’s a sponsor for this month’s deep dive article so all subscribers will get access to that one when it is published on Friday.

With some luck, this note gives you a ‘spring’ for the week ahead. Don’t hesitate to reply to this e-mail with questions, comments or insults… I read them all!

As always, thanks for reading.

Best,

Joël

P.S. If this content is valuable to you, consider a paid membership. Paying for content you care about is the best way to ensure a strong, independent and diverse media ecosystem. It’s the best way to stimulate new ideas, discussions and innovation in the spaces you care about. I believe it’s the future to be honest…

P.P.S. We need more female perspectives in the long form Procurement article space (clearly!). Who will it be?? We’re all waiting to back you!

The ‘Single Source of Truth’ for Vendors

I had an interesting exchange this week about outdated perspectives Procurement professionals may have on the best practices with regards to managing vendors in their systems. More specifically, on how having all your vendors in one place is no longer viable in today’s ProcureTech ecosystem.

The “single source of truth” concept is a guiding principle that says that for any master data object (in this case the vendor master record), there should only be a single system (source) where the data is maintained. This way, regardless of which other system needs the information, it is fetched from the “single source of truth” to ensure data integrity. Similarly, any changes initiated in another system need to end up updating the “master vendor record” in the single source of truth. This principle has been around forever when it comes to vendor master data management.

Is this principle outdated?

I don’t think so…

However, we can no longer view the vendor as a single data object. It is not viable, for example, to have your ERP be the single source of truth for your vendor information if you are now collecting prospective vendor information, risk information, diversity information, etc. in other systems. The ERP can’t and shouldn’t store this information (e.g. it doesn’t make sense to create vendors who have participated in an RFx but weren’t selected in a transactional ERP system).

A Supplier Relationship Management (SRM) system is now the best place to have a single source of truth for supplier information as it can support all these different types of vendor information and statuses. However, only a minority of companies have an SRM system… And even if you have one, you may not have all your Procurement applications connected to it yet… So, what do you do?

You need to break the vendor down into its constituent parts (Prospects, Transactional vendors, Vendor diversity information, Vendor Risk information, etc.) and establish a “single source of truth” for each part, crafting your overall vendor governance and reporting processes with this in mind (e.g. you still want to be able to join this information together with a unique vendor key to get an overall picture of a single vendor).

The answer to the question will be different based on the complexity of your ecosystem (hint: it will only get more complex with time...). However, spending time on this process with the above in mind is time well spent. And, getting your Procurement teams aligned on the model ensures high levels of trust in the data and, consequently, higher throughput for all activities related to dealing with vendor information.

Doing the hard work of dealing with the complexity of managing your vendor data will pay dividends! For starters, you may be able to stop asking vendors how much money you spent with them last year before negotiations *facepalm*.

Quote of the Week