According to a new HICX survey, almost 9 out 10 large businesses are relying on bad supplier data, putting them at major risk of fraud.
The data was complied from findings from some of the largest US and European businesses at the height of the Covid-19 crisis, with 89% admitting they were reliant on “bad data” that caused a lack of oversight into their supplier base.
The greater risk for companies was recognised by over 55% businesses who agreed that this reliance on bad data could be detrimental during times of crisis, including supply chain risk and the potential for fraud.
Although a lot of money has been injected into procurement and supply chain management systems over the last two decades, the survey highlights significant areas of weakness for some of the world’s largest firms.
Almost half (43%) of firms polled blamed their IT department for supplier data issues, while 82% cited a lack of ownership over the problem as a key challenge.
The findings are from a new survey of 100 senior procurement professionals from some of the largest US and Western European manufacturing and CPG businesses.
Omera Khan, Professor of Supply Chain Management at Royal Holloway, University of London, said: “Too few organisations appreciate the costs of supplier data that is incomplete, out of date, and of low quality. If they realised their vulnerabilities in terms of fraud, regulatory compliance, supply chain risk, and degraded purchasing performance, more organisations would invest in better supplier data management, and more appropriate systems.”
“Businesses are still tempted to try and use their procurement suites to manage supplier data – even though they’re ill equipped,” said 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.”
The full study can be accessed here https://bit.ly/2FA6XXh
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