Even the Chief Procurement Officers who focus almost solely on savings realize that procurement can deliver value across a wide range of areas. To misquote Vince Lombardi, “Savings isn’t everything…. It isn’t the only thing.”
The main theme of Ardent Partners’ recent research report, CPO Rising: Keeping Score (available here, here, here, or here – registration required) is procurement performance. The report presents procurement performance and operational statistics that readers can use to benchmark their performance and determine if they are operating at a Best-in-Class level. The report also shares the strategies that different CPOs use to measure their departments’ performance. I believe that the readers of the report, particularly those who focus almost solely on savings as a way to measure procurement performance, will find these CPO strategies both interesting and helpful. Here’s a small sample:
For Chief Procurement Officers (“CPOs”) and their departments, procurement results matter and they increasingly matter to the larger enterprise. Scoring procurement performance can be as complex and nuanced as the value that the function can deliver and linking that performance to overall business objectives and results can be even more difficult.
The report argues that CPOs must keep score of their team’s performance and that they should use the opportunity to develop a set of metrics that can help procurement prioritize and focus its resources, track and improve its performance, and help communicate the value that it delivers in support of enterprise objectives and what it plans to achieve in the future.
Procurement results matter and being able to effectively communicate them is a critical part of any CPO’s job description.
