How to Ditch Siloed Systems and Transform Supplier Engagement

Fragmented systems – often a symptom of legacy software and lagging digital transformations – keeps valuable business data compartmentalised across various platforms and repositories. Naturally, when data isn’t easily accessible it impacts a number of procurement processes. After all, how can you truly know and act with confidence when you only have half the data story?  

But it also has serious ramifications and causes major staff frustrations when it comes to visibility and transparency into critical supplier relationships and related supply chain dynamics.

The Problem With Systems Operating in Isolation

Consider a scenario where a procurement team is tasked with sourcing a critical component for a production line. In a siloed system environment, relevant data such as supplier performance metrics, pricing information, and contract terms may be spread across several applications – like supplier relationship management (SRM) software, enterprise resource planning (ERP) systems, contract management software, supply chain visibility tools and even spreadsheets. 

The team must locate, draw out and piece together the information before they can select the right component. It’s clearly not the most efficient or quickest way to get the job done. 

And it’s not just internal staff that suffer at the hands of siloed systems. Suppliers, too, are affected by the lack of visibility and coordination. Communication gaps, duplications, and conflicting information can strain supplier relationships and erode hard-earned trust.

Then there’s compliance issues. Say data fragmentation prevents a manufacturing company from adequately monitoring supplier compliance with environmental regulations. Without a unified data platform, tracking supplier emissions, waste management practices, and regulatory certifications becomes an uphill battle. In this scenario, the company may face regulatory scrutiny, potential fines, and damage to its corporate reputation, and supplier relationships.

What Life Looks Like With System Unification

At the other end of the scale we have unified data platforms. These centralised hubs are where disparate data sources from across the procurement ecosystem converge. With all systems unified, everyone gets access to a holistic view of supplier relationships, procurement processes, and supply chain dynamics:

  • Stakeholders get full visibility into procurement activities, from sourcing and contracting to supplier performance and risk management.
  • Communication is improved and information can be easily shared among cross-functional teams and external partners.
  • Redundant processes, manual data entry, and inefficiencies are replaced with streamlined workflows, automated tasks and advanced analytics.

For suppliers, when all data works together you can leverage a range of practical applications that significantly enhance your relationship. For example:

  • Streamlined procure-to-pay (P2P) processes fosters transparency and trust between buyers and suppliers. This ensures that transactions are conducted smoothly and accurately.
  • Assurance of timely payments or early payments through dynamic discounting incentivises suppliers and strengthens their financial position. This leads to stronger and more cooperative relationships.
  • Streamlined approvals and contracting processes enable better communication and collaboration. This supports buyers and suppliers to work together to achieve common goals.
  • Supplier portals with real-time cloud functionality provides suppliers with easy access to relevant information and resources. This leads to greater engagement and satisfaction.

The Practical Side of Systems Integration

It’s a grand promise that technology can enable procurement teams to better engage with their supply base, but it’s more than possible. Technological advances have given us artificial intelligence, blockchain, the Internet of Things and robotic process automation. Software vendors have already taken advantage by embedding these technologies into a range of procurement-ready solutions. These solutions offer all the antidotes to siloed systems – seamless integration, intelligent automation, and actionable insights.

But the number one attribute needed to address silos and make use of the value hidden within these locked-in data sources is technological interconnectivity. This means having a central hub – such as an SRM or ERP – which integrates with the third party systems orbiting your businesses (or ideally offers native best-in-class capabilities). Integrated solutions ensure that all information remains up to date in real-time, with any changes or updates made in external systems reflected accurately within the main system. 

By taking an integrated approach, you eliminate data gaps or the need to toggle between systems and spreadsheets. Instead, a single source of truth across the business encompasses how a procurement teams interact and work alongside its supplier base, including identifying, acquiring, and overseeing a product, service, or any other resource necessary to run the business and deliver quality solutions to end consumers.

It’s Time to Unite

Unfortunately, siloed data can easily occur. If separation of data is making life harder for your procurement teams and suppliers you can take solace in the fact that many organisations, particularly large ones, naturally trend toward siloing. Also know that you can deliver the level of engagement demanded by modern suppliers with immutable, actionable data that provides oversight of all aspects of supply chain operations.