Technology Insight Corporation (TIC) has worked for the last ten years to ensure that their clients have deployable and effective tools to help organizations create sustainable solutions to reduce their error rates. After working with hundreds of companies to root out duplicate payments and errors, which cost them millions of dollars a year, TIC has found a common weakness for most companies: Unclean Vendor Master Files.
The types of unclean data in Vendor Master Files vary, from data entry standards to pure duplications. Surprisingly, one of the things that always reveals itself during a recovery audit or the implementation of the DataShark Tool is the preponderance of Vendor Master Files within the system that have never, ever been used. Who knows why they were created in the first place, but it is always eye-opening to see how many of these are really out there, cluttering up your system.
The goal for TIC clients is to make sure that 65% of the vendors available in the active system are of active usage within the past 12 months. TIC’s wealth of data analysis has revealed that when an organization meets this 65% benchmark, it is an excellent indicator that their underlying business processes are properly aligned and optimized.
For TIC clients, utilizing our 5-Step Vendor Master File Clean-Up Process can easily bring them close to this benchmark while the implementation of a detailed new vendor creation program ensures that they remain at this level.
So, where to start? It’s easy, start with Step 1. As simple as it sounds, many of our clients want to mix up the steps and move the sequence around, but we encourage you to resist the urge to do so.
The first step is to inactivate the active vendors you have never used. By segregating out these vendors, you can then double check that there are no open PO’s associated with these vendors – be sure to do this before any vendors are inactivated – nothing is more annoying to a purchasing department that to receive an order, only realize that the vendor has mysteriously disappeared from the system. Even better, you may want to engage the purchasing department to cross-check the list before you proceed with the inactivations, just to be safe.
This clean-up step can take a company from a usage rate as low as 10% to as much as a 10 or 20 point overall gain. TIC’s history has shown that when the full 5-Step Vendor Master File Clean Up is completed, a 35 point gain is easily achievable. By adding in other on-going techniques and processes, organizations are able to implement remarkable changes which positively impact core of their business.
Karl Andersson has devoted his career to helping organizations improve their business processes. For 15 years, he has worked with multitudes of Fortune 500+ companies as the CEO of Technology Insight. Before this, he spent 10 years working in the audit and consulting sectors, which included large international projects in both Europe and Asia.
Karl brings a combination of industry expertise and real-world experience. The diversity of his clients has allowed him to understand a variety of industries, and the unique challenges that each of them face.