Author: Tom Flynn, VP Marketing, PRGX Global – for PASA.
Implementing a robust Supplier Information Management (SIM) solution provides a rich set of supplier data collection, validation and management services across an entire organization, but despite the steep benefits of a complete SIM solution, there is still a lot of confusion as to what exactly SIM is…
By now we’ve all heard a number of competing three letter acronyms (i.e., SLM, SBM, SPM, etc) and we’ve also heard a number of differing explanations of what SIM actually does. The truth is that most solutions available in the marketplace only borrow the three-letter “SIM” acronym without actually delivering a solution for properly managing supplier information. SIM is a methodical and scalable process of communicating with suppliers and collecting, verifying and managing related data and documentation.
SIM provides management and governance over the massive volume of supplier data coming from many disparate sources. SIM is not limited to a subset of supplier data, but rather, SIM by definition, includes all of the relevant data and documentation that your company would ever need to perform and optimize interactions and transactions with suppliers.
A proper SIM solution spans the entire vendor lifecycle, from selection to onboarding, credentialing, enrichment, spend analysis, profit recovery, invoice/payment visibility, and analytics. Leveraging a SaaS application for SIM allows companies to benefit by ease of use, controls, workflow, degree of automation, and ease of integration with ERP systems and downstream P2P toolsets.
Clients planning to develop or bring in a SIM solution should expect to receive a very distinct and impactful set of benefits that will most-assuredly help to save them time and money while helping to avoid risk, fraud and unnecessary operational costs.
Here are the top SIX benefits you can expect from a proper SIM solution.
- SIM ensures supplier data governance
SIM gives clients a platform to ensure all information is controlled and governed to the highest possible standard. Clients using SIM can create workflows that insure the observance of all internal controls as well as external regulations. Clients that fail to follow internal controls and external regulations are living constantly under the threat of fines, penalties, profit loss, lawsuits, reputation damage, operational inefficiency and much more.
- SIM enforces global standards while allowing for local flexibility
A well-built and complete SIM solution enables a large or mid-sized organization to institute a centralized set of SIM rules (in the form of validations, workflows, etc) in their pursuit of their ideal supplier information management methods. While a SIM platform can ensure the centralized global standard across the company, the system can also allow for decentralized and disconnected divisions to observe necessary exceptions to the centralized rules.
- SIM generates actionable supplier information
The information collected from SIM serves as a valuable reservoir of new information and insight to springboard future cost-saving and time savings decisions. For example understanding the diversity status of a supplier may encourage a purchasing agent to look at that supplier differently in pursuit of their CSR goals.
- SIM enforces accuracy and productivity
With a properly managed suppliers and high accuracy throughout the population of records, clients can manage tasks more precisely and more quickly. End-users with access to a SIM system spend less time searching for critical information or deciding between duplicate incidences of the same information.
- SIM allows users to manage supplier information by exception
Clients leveraging a SIM system can rely heavily on automation to complete tasks and manage supplier data. The vast majority of communication with suppliers and the entirety of supplier data and documents are pushed through pre-configured workflows to ensure proper processing and accuracy. End-users are only expected to get involved in supplier information management to manage rare exceptions and resolve disputes.
- SIM improves the ROI of downstream software systems
Clients using SIM are expected to see an increase in the number of suppliers taking part in P2P initiatives as well as a dramatic increase in the accuracy and the level of completeness of supplier information that is shuttled through to the supporting software. Clients leveraging more accurate data from more suppliers will see huge increases to the ROI advantage of these other systems.
Understanding these benefits (as well as many other) it becomes crucial for all P2P professionals to think about their future SIM soltion from the ground up and really contemplate the impact that accurate (and available) supplier data will have on their environment. More importantly P2P professionals need to think about the cost of NOT having a SIM solution.