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Realities in Tracking Procurement KPIs in 2017

Stephanie Dula   Feb 22, 2017      

Our recently released webinar, Growing Pressures & Opportunities in Procurement: Achieving More with Less, revealed a lot about the current state of procurement metrics and processes across industries. According to polls we conducted during this webinar, purchasing decentralization and siloed departments represent two of the biggest obstacles to tracking procurement Key Performance Indicators (KPIs) effectively. These two issues are closely related, of course, and together create a lot of confusion for employees making purchases, especially when they are in widespread or remote locations. The result is increased costs since employees don’t always have the most current inventory and approved supplier data at their disposal, nor are they aware of spend limits and approval rules. This lack of integration makes it difficult to accurately track the most crucial procurement KPIs. Additionally, it causes major headaches for payables downstream when they attempt to find out if purchases were ever authorized in the first place.

As co-presenter Foy Mainor of Paramount WorkPlace points out, a good starting place for any initiative to integrate and standardize procurement metrics is the requisition approval process itself. An organization must first identify and clearly define approval requirements, and then to refrain from overloading the process with too many approvers. This is especially true for everyday items. These purchases often carry lower risk, and therefore shouldn’t rise to the level of excessive employee oversight. Routing rules and catalogs can take care of most of these everyday workflows. A robust employee approval process should kick in mainly to manage exceptions to the normal process.

Another reality many procurement departments face is a inability to effectively maintain supplier data, which ultimately leads to a deterioration in supplier relationships. If buyers have out of date pricing, inventory, and payment information, POs will be rejected and returned with discrepancies, with phone calls and emails going back and forth until an understanding is reached. But after all of this, supplier data likely remains outdated in other departments, because siloed departments ensure that no single system of record exists and procurement KPIs are not reported effectively.

Do these scenarios sound familiar? If you’d like to understand more about best practices to overcome common procurement challenges (and to weigh in the poll questions) launch our free on-demand webinar featuring Paramount WorkPlace.


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