Supplier data is increasingly determining how well companies can manage risks, costs, emissions, and regulatory requirements in the context of ESG. Procurement is thus becoming the interface between the supply chain, data management, and corporate governance. The key is not to collect as much data as possible. Rather, it is crucial to identify the essential information and ensure it is reliably available and usable.
The Management Question
How can companies structure their supplier data in a way that effectively supports procurement, sustainability, resilience, and compliance – without simultaneously overburdening both procurement and suppliers with additional individual requests?
Based on our experience at adesso, the answer does not lie in yet another questionnaire or an isolated reporting tool. Companies need clear data accountability, common standards, and processes that can translate relevant supplier information into procurement and management decisions.
From Cost Lever to Management Function
For a long time, procurement was primarily measured by price, terms, and supply security. These tasks remain central. However, they are no longer sufficient when companies need to identify risks along the supply chain early on, reliably meet ESG requirements, and manage material flows more transparently.
Today, in addition to costs and availability, procurement also influences supplier structure, material origin, data quality, and risk exposure. It plays a key role in determining whether information on emissions, social standards, critical raw materials, or product compositions is available in a format that management can actually use.
The Practical Problem
In many companies, supplier information is still scattered across procurement, quality, development, logistics, and sustainability systems. Master data is often inconsistent, supplier documentation exists as paper documents, and key metrics follow different definitions. As a result, data must be manually compiled, standardized, and validated time and again for reporting, audits, or customer inquiries.
This takes time, creates uncertainty, and always makes it more difficult to prioritize necessary actions. This becomes particularly critical for high-risk product categories, complex supply chains, or stringent requirements regarding origin, emissions, and product information. In such cases, not only is relevant data missing, but the company also lacks a shared understanding of which information is required for which decision.
Why a Reporting Tool alone is not enough
A report can certainly provide transparency. However, it does not replace the critical issue of data capability. Supplier data is generated in many places: during supplier selection and qualification, in contracts, product development processes, quality inspections, logistics operations, and service processes. If these processes are not coordinated, data collection remains merely sporadic, and the effort increases with every new incoming requirement.
Technically, therefore, more is needed than just an additional application. What is required are interoperable data models, unique supplier and product identifiers, secure external interfaces, and transparent rules for quality, access, and approval. From an organizational perspective, a clear division of roles in this regard between procurement, sustainability, business units, IT, and compliance is essential.
The Root Causes
Incomplete data rarely results from a single cause. Often, several factors converge:
- Separate systems: Procurement, quality, development, logistics, and ESG management use different data sources and metrics.
- Unclear data responsibility: There are no clear rules regarding who requests, verifies, approves, and updates ESG-related data.
- Inconsistent standards: Suppliers provide information in different formats, at different points in time, and with varying levels of detail.
- Lack of prioritization: At the start of their initiatives, companies request too much data instead of prioritizing critical suppliers and product categories first – and learning from that.
- Weak supplier engagement: Without a clear purpose, realistic requirements, and secure processes, suppliers become less willing to provide data.
The Target State
Supplier data only becomes a strategic infrastructure when it is not merely collected for individual reports, but is permanently integrated into procurement and management processes and continuously improved. This requires a shared view of critical suppliers, product groups, materials, and risks.
A robust target vision comprises four elements: relevant data fields and clear definitions, clearly defined responsibilities, technically integrated data flows, and key performance indicators that bring together procurement, risk, sustainability, and cost-effectiveness. The goal is not to achieve complete transparency in a single step, but rather to gradually build a better foundation for decision-making.
The Four-Step Approach – and How It Works in Practice
The four steps remain abstract unless they are illustrated using specific systems and data flows. The approach can be understood in very concrete terms by examining projects on ESG data integration at internationally active, medium-sized manufacturing companies.
1. Set priorities
Here, critical product groups, suppliers, and data relevant from a regulatory or economic perspective should be identified (heat mapping).
In practice, this can already be implemented using existing in-house tools: In the SAP Sustainability Control Tower, the “Analyze ESG Data” function uses a drill-down to locations and business units to show which suppliers or product groups deviate most significantly from the target curve for metrics such as Scope 3 emissions. A company with a fragmented supplier base can thus identify – without sending a single additional questionnaire – which small percentage of its suppliers is responsible for the majority of the supply chain’s carbon footprint – and that is precisely where data prioritization begins.
2. Define the Data Model and Responsibilities
Companies must determine what data is needed, who is responsible for it, and how quality and updates are ensured.
The Data Provider Interface concept in the SAP Sustainability Control Tower separates master data from transaction data and assigns each data point a subject matter expert (Topical Lead) and an operational data steward (Data Steward). For procurement, this means specifically: A supplier ID in the procurement system must uniquely reference the same entity in ESG reporting; otherwise, duplicate counts or gaps will arise during every audit.
3. Connecting Processes and Systems
In this step, procurement, quality, ESG, and risk processes should be linked via shared identifiers, interfaces, and workflows. In doing so, the principles of data minimization as defined by the GDPR must be observed.
This is where the real difference between a reporting tool and an infrastructure becomes apparent. Using SAP Datasphere as a central data platform, emissions data from SAP EHS Management, product compositions from SAP S/4HANA for Product Compliance, and circular economy data from SAP Responsible Design and Production can be linked to create a single, audit-ready dataset. For companies affected by the EU Packaging Regulation (PPWR), this means in concrete terms that packaging data per SKU must be exportable and verifiable as of August 2026 – a requirement that is virtually impossible to meet on time without integrated data flows between procurement, product development, and compliance. Read more about this in another blog post here.
The example of an internationally active, medium-sized manufacturing company with several thousand employees and annual revenue in the low single-digit billions demonstrates just how effective such integration is in practice. Using a combination of SAP Sustainability Control Tower and SAP Sustainability Footprint Management, the company integrated and automated approximately 200 to 250 key performance indicators 4. Scaling with Suppliers
4. Scaling with Suppliers
Here, data requirements are introduced step by step, communication on an equal footing is facilitated, and the benefits of data exchange are made transparent for both sides.
SAP Sustainability Data Exchange (SDX) offers a standardized interface through which suppliers can enter ESG data once and make it available to multiple customers, rather than responding to each customer inquiry individually. For product groups subject to proof-of-origin requirements – such as those under the EU Deforestation Regulation (EUDR) or the Carbon Border Adjustment Mechanism (CBAM) – this significantly reduces the data collection burden on suppliers while simultaneously increasing the response rate, as the benefits for both parties become clear.
A Checklist for Decision-Makers
Companies should address the following questions in advance to establish a better basis for decision-making:
- What supplier and material data is currently missing within the company for key risk, procurement, or ESG decisions?
- Which product categories and suppliers are of the greatest economic, regulatory, or operational significance?
- Are data responsibility, approvals, and quality controls clearly defined between procurement, sustainability, business units, and IT?
- How can new requirements be integrated into existing procurement processes without creating additional ongoing manual work?
- Which three measures will measurably increase transparency and manageability within the next twelve months?
Conclusion
Supplier data is not a byproduct of ESG reporting. It is becoming a critical prerequisite for robust procurement, transparent supply chains, and more resilient corporate management.
If companies now strategically align data, processes, and responsibilities, they can reduce manual effort and create a better, data-driven foundation for their cost, risk, and sustainability decisions.
At adesso business consulting, we provide comprehensive support to companies throughout the entire process. Our experts help you structure supplier data in a way that effectively supports procurement, sustainability, resilience, and compliance without creating an excessive workload. Reach out to us – we look forward to hearing from you!
