In the face of supply chain disruptions and major shifts in economic conditions, many organizations are working with more vendors to establish supply chain resiliency and get products at the best possible price.
As the number of vendors increases, so too does the complexity of management and the potential for issues. A single company may manage relationships and contracts with hundreds of suppliers yet still conduct this management using spreadsheets.
Supplier information management (SIM) brings order to the chaos of vendor management and data organization, allowing companies to reap the benefits of better access to data and more secure data governance. These management tools make it easier for procurement teams and accounting to maintain an organized, scalable process.
Today we’ll share an overview of supplier information management:
- What is supplier information management?
- Things to look for in a supplier information management solution
- Benefits of implementing supplier information management
- How a procurement platform with SIM capabilities saves time and money
What is supplier information management?
Supplier information management is the collection, storage, verification, and maintenance of data concerning suppliers and their products or services. In a SIM system, an organization creates and maintains a detailed database for the suppliers they do business with. This data is useful for performance reviews, analysis, budgeting, forecasting, and more.
A SIM system collects all information necessary for conducting business with a vendor, as well as historical and benchmarking data. The information a SIM system collects can include the following:
- Contact information
- Pricing and costs
- Production capabilities and turnaround estimates
- Payment terms and accounting information
- Delivery schedules
- Historical transactional data
- Price benchmarking
- Performance data
- Contract information
The goal of supplier information management is to increase the communication between buyers and suppliers, improve supplier relationship management (SRM), and centralize data for future use.
What elements to look for in SIM technology
A supplier information management solution (sometimes called a vendor management system) is most powerful when part of a procurement platform. Look for a platform that centralizes vendor information while providing easy workflows and curation for procurement across your organization.
Here are a few benefits to look for when evaluating technology solutions:
Intuitive, flexible use: Ease of use is an important ingredient in SIM. Your chosen solution should be easy for IT and managers to administer and simple for buyers to navigate. Look for technology that makes it easy to perform daily research, procurement, and reporting activities, including:
- Dynamic search capabilities
- Preferred vendor curation
- Workflows and approval automation
- Role-based spend guidelines
Real-time data access: Constant, granular access to spend data makes reporting easier and more effective. It provides a consistent, complete view of the procurement function and the vendors within the system.
Reporting and analytics: Centralized data is most valuable when it’s easily accessible. The right spend visibility brings context to your purchasing, highlights opportunities for savings and growth, and informs discussions about vendor selection and performance.
Integration potential: SIM should be a part of your larger information ecosystem. Look for a solution with off-the-shelf and API-based integration opportunities to prevent redundant data input, ensure accurate numbers, and reduce information silos.
Finding a solution that meets the above criteria ensures you get the most out of your SIM program, realize better cost savings, and achieve smoother operations within your procurement process.
7 Top benefits of supplier information management
Supplier information management is a proven method for improving procurement outcomes and financial performance. Using a procurement management solution like Order.co allows you to perform procurement and vendor data management within a single, easy-to-use platform.
Here are seven ways implementing supplier information management improves the procurement process:
Centralizing your vendor data with SIM lets you streamline processes such as purchase order creation, order processing, payment, and tracking. It also helps identify vendors with the best prices and services, as well as keep track of quality assurance protocols. It allows all departments and stakeholders access to an organized record of communication and transactions with vendors.
Enables performance management
SIM allows companies to track and measure supplier performance over time. Centralized supplier information allows reporting and analysis on supplier quality, contract compliance, cost savings, and other metrics that can be used to make informed decisions about suppliers. It improves strategic sourcing initiatives and ensures cost performance remains strong over time. Additionally, it helps companies identify gaps in performance or the need to evaluate other options.
Vendor Scorecard Template
Download our free vendor scorecard to make objectively evaluating vendors easier.
"*" indicates required fields
Improves information governance
Ensures secure communication protection against unauthorized access, prevents data loss or theft, and provides an efficient platform for managing all vendor-related activities. This level of security is especially important when handling sensitive information, such as bank account numbers.
Lowers supplier risk
SIM allows organizations to maintain up-to-date and accurate records of their suppliers, including contact details, financial terms, performance profiles, and banking info. It ensures compliance with regulatory and legal requirements and reduces the potential of procurement fraud through supplier data manipulation. Data security is important since nearly 70% of organizations experiencing fraud report that the most disruptive incident came via an external attack or collusion between external and internal sources.
Reduces AP processing burdens
A supplier information system streamlines the payment process and reduces manual data entry, resulting in fewer errors (such as invoice duplicates or data entry errors) and more accurate payments. Automating the payment process with SIM also allows businesses to track spending patterns better, identify potential opportunities for cost savings, and improve forecasting and budgeting.
Speeds the buying cycle
A centralized procurement solution allows buyers to easily search for and access relevant supplier information, such as product availability, pricing, delivery times, and payment terms. With information at their fingertips, buyers quickly identify potential vendors and make decisions faster. Some solutions, like Order.co, enable direct ordering and approval from within the system, further speeding the procurement process.
Enables reporting and KPIs
With a SIM system, managers and Finance leaders use data within the system to track key performance indicators (KPIs) such as delivery times, quality of products, order accuracy, cost, and contract compliance. This provides visibility into each vendor's performance and real-time data for stronger procurement outcomes and supplier lifecycle management. Reporting allows stakeholders across the organization to quickly gain actionable insights for better-informed decision-making.
How Order.co enables better supplier information management
Supplier information management (SIM) is an invaluable tool for organizations that want to simplify and streamline their vendor management process. It centralizes data, reduces issues, and provides more visibility into spending and vendor performance.
Using a spend management solution like Order.co helps you keep track of all procurement activities, centralize supplier information, and enable better accounts payable management in one place. Order.co offers strong features for better outcomes throughout the procurement process:
- A centralized vendor database with thousands of high-quality vendors for faster, lower-risk procurement
- Procurement through curated supply catalogs for total, role-based spend management
- Line-level general ledger (GL) coding for accurate spend categorization and analysis
To learn more about using Order.co and bring your procure-to-pay and supplier information management into sharper focus, request a demo.
Schedule a demo to see how Order.co can simplify buying for your business.
"*" indicates required fields