Most large businesses are reliant on bad supplier data, which places them at major risk of fraud.
This is according to a new report from HICX, based on a poll of 100 senior procurement professionals from large manufacturing and CPG businesses from the US and Europe.
The report states that 89 percent of enterprises lack oversight into their supplier base. Also, more than half (55 percent) agree that by relying on bad data - especially during unprecedented times of crisis - increases the risk of being defrauded.
The report further states that most large enterprises have made “substantial” investments in procurement and supply chain management systems over the past two decades, but they still have major areas of weaknesses.
Almost half (43 percent) aren’t aligned with their IT departments, which often results in supplier data issues, while more than four in five (82 percent) don’t have ownership of the problem, which makes for an even greater challenge.
“Too few organizations appreciate the costs of supplier data that is incomplete, out of date, and of low quality. If they realized their vulnerabilities in terms of fraud, regulatory compliance, supply chain risk, and degraded purchasing performance, more organizations would invest in better supplier data management, and more appropriate systems,” said Omera Khan, Professor of Supply Chain Management at Royal Holloway University.
“Businesses are still tempted to try and use their procurement suites to manage supplier data - even though they’re ill equipped,” added Costa Xyloyiannis, CEO of HICX.
“Those that do are opening up the business to unacceptable levels of risk, which is further heightened during periods of crisis.”