What's the true cost of bad supplier data?

Much is said about how good supplier data can help procurement make better decisions, negotiate more favourable pricing, and help avoid possible risks and disruptions in the supply chain, but how does bad supplier data affect the supply chain?

For a lot of companies, bad supplier data can mean extra costs if it leads to inefficiencies and poor decision-making due to inconsistent information, and in some cases, lead to serious mistakes and increased risk with consequences that cannot be prevented or addressed until it's too late.

Data accuracy should be a big focus – as for 96% of procurement leaders, agility is a bigger priority now than cost savings, and to achieve agility, one thing needs to be in place: solid and robust data and a reliable way of quickly seeing what the data is showing. 

Bad supplier data leads to bad decisions and can be extremely time-consuming for employees. Studies have shown that workers that deal with data and knowledge can spend up to 50% of their time trying to locate data, identifying errors in data or seeking confirmatory sources of data to support information that they do not trust.

And according to Omera Khan, professor of supply chain management at Royal Holloway, University of London, “too few organisations appreciate the costs of incomplete, out of date, or low-quality supplier data. If they realised their vulnerabilities in fraud, compliance, supply chain risk and purchasing performance, more would invest in better supplier data management."

The consequences of bad supplier data

There are tangible consequences of bad supplier data for procurement departments and companies:

  • Inefficient process: with bad data, the supply chain gets confused, and it gets harder for procurement and the stakeholders to build a better process. There's no knowledge of what happened in the past, so the decision-making becomes slower and riskier.

  • No control of the spend: procurement that doesn't have good supplier data has a lack of control of the real monthly and annual spend,  and when their is poor visibility on exactly where spend is being allocated, it is very difficult to make strategic decisions that are truthful or free from risk.

  • Double payments and duplicates: if a company doesn't keep track of it's supplier data, it can also mean finance data linked to it also being unreliable, which can lead to duplicate payments for the same invoice.

  • Ineffecient supplier selection: if the data regarding suppliers is bad, then the sourcing process can also be unreliable leading to unsuitable suppliers being selected putting the supply chain at risk.

  • Missed opportunities for cost reduction and cost savings: if there's insufficient data from past purchases or poor data relating to suppliers and the market, it gets harder for procurement to strategically negotiate the best conditions and get the best deal for the company. 

The good news is, it is now easier than ever to get control of your data and begin to use it to make better decisions.


To find out how Maistro enables organisations to both capture and harness data even with low-value and high transaction categories, get in touch for a no-obligation proof of concept demonstration.

Contact us

Why transactional data shouldnt just be reserved for strategic planning
May 7, 2021 at 2:00 PM
One of the most important tools for procurement professionals when planning for strategic purchasing decisions is having the ability to access solid and reliable data. But when it comes to making the same decisions with non-strategic and lower-value spend in the tail, oftentimes, swathes of transactional data flows through the process going uncaptured and under-utilised.
Read more
Supply chain leaders lack data and tech for cost-saving decisions
June 1, 2021 at 10:44 AM
In early 2021, IHS Markit conducted a survey with procurement professionals under the title 2021 Supply Chain Insights Global Survey , revealing that "supply chain professionals often lack the tools, data, and platforms needed to diversify their supply chains and optimise their processes."
Read more
You have the data, but what is it telling you?
January 7, 2022 at 3:01 PM
Data has become one of the most valuable assets a company can have. And when it comes to procurement, having reliable, accurate and up-to-date data is the key to carrying out successful strategic work that will bring the company the best deals and savings.
Read more