In part 2 of this series on “benchmarking the procurement benchmarkers,” we investigated some of the non-profit and for-profit providers that are oriented towards membership-based research and advisory services. In this follow-up installment, we will transition our coverage to two larger consulting organizations: A.T. Kearney and Accenture (who is also the largest procurement BPO provider in the market).
A.T. Kearney – Beyond ROSMA
We’ve previously analyzed and discussed A.T. Kearney’s ROSMA benchmark (and related framework) here, here, here, and here, but the firm also has other benchmarking capabilities as you might expect. It certainly knows how to do price/cost benchmarking in the context of its sourcing services that it performs as a large management consultancy. However, the closest thing that it has to a true benchmark beyond ROSMA is its AEP study (Assessment of Excellence in Procurement).
ROSMA somewhat grew out of the AEP study, but AEP is much broader. AEP is primarily an assessment of procurement capabilities, with some level of measurement surrounding performance (of which ROSMA is central). The capabilities/practices are organized generally around the A.T. Kearney House of Purchasing and Supply Management, but also uses A.T. Kearney’s ‘purchasing chessboard,’ which is an 8x8 matrix of procurement techniques, and even has its own website.
The AEP study is now conducted roughly every 2-3 years (2014 is the latest), and it is a complementary study for qualified practitioner firms. It is used to generate thought leadership and of course to use for diagnostic value-based selling of A.T. Kearney’s services. The study has been conducted seven times prior to 2014, and its last four installments have averaged about 300 participants in a study that is geared towards large enterprises (i.e., spend greater then $5B).
Because of its good sample size of large firms, AEP is able to provide useful insights in aggregate and also within various study population segments. For example, it segments study participants into “leaders” and “followers” based on the capability/performance scores to illustrate the differences between more advanced and less advanced procurement organizations. An example of the study can be found here or here, but there are many other incarnations of it that can be found out on the open web.
The study is not really so much a steady-state benchmark, and it tends to get tuned to topical issues that Kearney feels are relevant for that particular study. But, it does have a regular cadence to it, a similar look and feel, and some recurring metrics to identify trends across the multiple studies. It also maps some of the capabilities as value drivers to the various components in the ROSMA metric.
Bottom line: It is a very good study to participate in and all practitioners and providers alike should at least review the historical study findings for learning and for supporting transformation efforts.
Accenture is a bit of a mixed bag with regards to benchmarking. Its legacy BPO business and consulting groups have diagnostics which they use to value-sell, and they have their “Procurement Mastery” and “High Performance Procurement” surveys that they used to generate thought leadership reports like you can find here. These studies are fairly typical for large consultancies, and the Accenture ones are very polished, and relatively insightful. That said, like other similar consultant reports, these studies do age quickly, and you'll tend to now see the report dates being downplayed or stripped out completely to give the reports more shelf life. They tend to become non-billable work for consultants on the bench rather than part of an integrated diagnostic.
With the recent acquisition of Procurian, the benchmarking capabilities get much deeper, particularly with regards to category cost/price/performance benchmarks that Procurian has for large swaths of indirect spend. Procurian, like the Ariba sourcing services organization that Accenture acquired years ago, not only has these benchmarks, but ties them into formal spend analysis tools and resultant opportunity identification diagnostics to develop prioritized opportunities and “flight plans.” Ariba built these as part of its ABCD (Ariba Business Case Discovery) diagnostic that combined previous diagnostics (and price/cost benchmarks), third party benchmarks (from Hackett, CAPS Research, CEB, etc.), and from data extracted from Ariba systems via the Ariba Procurement Benchmarking Program. Ariba still conducts this program, but really uses it to facilitate customer adoption of its solutions rather than as a value-selling capability. We expect this to change though, especially as SAP is ramping up its Value Engineering group activities to sell both its on-premise legacy SAP Procurement applications, and of course the new cloud based applications acquired from Ariba.
Bottom-line: Accenture has very deep price/cost/performance benchmarks based on its BPO business and its acquisition of Ariba sourcing services, but its more general procurement performance/capability benchmarking capability is less clear relative to the more well-known procurement benchmarking services in the market.
In our next and final installment of this procurement benchmarking series, we will highlight some of the trends with regards to automated procurement benchmarking and some of the trends that are occurring across a wide variety of service providers that include not just the professional services providers, but also technology providers, and content/intelligence providers.
As we wrap up this part of the series, it should be clear that the procurement benchmarking provider market is diverse, and the value that you get from the providers will depend on what you are looking for, how much you want to invest (in time and in money), when you need the insights, the depth/quality of the insights that you really need, and what you will do with that information to support your needs – whether as a one-time exercise or on an ongoing basis. As always, if you would like to discuss your particular needs in procurement performance measurement and the best strategies to use benchmarking providers of any sort, please don't hesitate to contact us.