Ardent Partners, in conjunction with Zycus, is pleased to present this research report, The ROI of a Best-in-Class Procurement Department. Interested readers can access the report with our compliments by clicking here.
Leading executives today understand that a top-performing procurement operation can deliver a competitive advantage. But the simple truth is that a majority of business leaders have never been exposed to a Best-in-Class procurement team and simply lack the belief that one can exist within their enterprise. Over the past decade, Ardent Partners has benchmarked the performance of thousands of distinct procurement organizations and examined and quantified the impact that these teams can have on the business results and operations. This report, sponsored by Zycus, presents the key findings of this ongoing research and, for the first-time in this industry, delivers the ROI of Best-in-Class procurement department.
Best-in-Class procurement functions are known for their success across a multitude of supply management criteria driven by the tight execution of their procurement programs across the management of their people, systems, and operations. These leaders have been able to build and develop procurement programs that succeed based on a number of factors, described in this report (click to download). Some of the key capabilities that the Best-in-Class possess include having clear visibility into spend, processes, and suppliers, and a holistic management of the source-to-settle process. There are many, many Best-in-Class capabilities to consider and this is just a sample of them from the report.
Other key differentiators for Best-in-Class procurement teams include high adoption rates for automated business solutions. By far, the Best-in-Class lead the way in the adoption of automated spend analysis, eSourcing, contract repositories, and other source-to-settle solutions. Considering their higher overall adoption and the gap between the maturity classes, it is no wonder that the Best-in-Class are able to outperform their peers in driving more spend under management, identifying more savings, realizing more savings, and other key performance indicators (KPI). In particular, spend under management is such a critical KPI that Ardent uses it as a starting point in the definition of its Maturity Class Framework.
Based on the wide margin between the Best-in-Class and other procurement departments on spend under management (click to download the report and see for yourself!), it will come as no surprise that Best-in-Class procurement departments gain a much greater return on investment (ROI) for their total enterprise spend than their peers. And these benefits cascade down into greater savings percentages and amounts, which, at scale for a multi-billion dollar enterprise, can be hundreds of thousands or millions of dollars in savings.
At the end of the day, it can be difficult for some Chief Procurement Officers and procurement teams to demonstrate their value to the greater organization, particularly if that organization regards procurement as the back-office band of buyers from yesteryear. But thanks to tangible measures like spend under management, CPOs and their teams can not only achieve high performance for the enterprise, they can also demonstrate it, which is a key way to win more influence within organizations.
Want to learn more? Interested readers can access the report with our compliments by clicking here.