We posted a multi-part series (see Related Articles) on A.T. Kearney’s ROSMASM performance benchmark / framework that the firm is now offering through a partnership with ISM and CIPS. We just received a Frequently Asked Questions document from AT Kearney that seeks to provide additional details on the ROSMASM “Performance Check” and are posting it here for our readers.
ROSMASM Performance Check FAQs
The ROSMASM Performance Check, the new standard to help procurement organizations measure performance, has received positive feedback following its January launch.
As with any new program, the first year will bring insights for us to incorporate as we move forward. Meanwhile, answers to some of the questions asked by industry experts and business professionals follow:
Will there ever be a fee for using the Performance Check?
We expect the ROSMA Performance Check to remain a no-cost resource for companies, procurement professionals, and other organizations. The initial term for the service is five years, giving us time to develop a visible scale of participants, overall and by industry. Ongoing and growing annual participation will support the evaluation of trends and let participants monitor progress and compare results over time.
Do we have to share our results to get an assessment?
Participants receive a customized assessment regardless of whether they share their results and receive follow-up from Institute for Supply Management (ISM), the Chartered Institute of Purchasing and Supply (CIPS), or A.T. Kearney.
Won’t the benchmarking data quickly become outdated?
ROSMA provides indicators of a procurement team’s performance and productivity. By definition, no two teams are identical in terms of maturity, scale, or resource mix, nor do they address the same categories at the same time with the same spending and specifications. What is valuable is the ability to understand how you are doing in terms of these high-level indicators relative to other organizations—are you in the ball park, way ahead, or lagging your peers? More important, how is your team progressing over a multi-year period compared to a previous period? For example, the Performance Check could indicate that your team has increased its spend coverage by 20 percent or its sourcing velocity by 10 percent.
Procurement has yet to be consistently and actively managed along the same lines as other disciplines such as supply chain, customer relationship management, or finance. Because performance varies widely both across and within industries (due to a lack of standards and focus on driving the profession forward) aging data is not an issue. Or, to put it another way, there is ample scope for improving the way procurement is measured, and it will take years—possibly a decade—before the variance narrows. For now, volatility is more correlated to specific years and economic cycles.
Does the Performance Check support cross-group comparisons?
Yes, and in fact some of our clients are already doing this. Performance Check benchmarking helps quantify the value improvement potential and identify where to focus attention for best results. The Performance Check can be used to support cross-group comparisons when the participating company completes the survey by team or unit and then integrates the results—whether independently or by working with A.T. Kearney.
The process will eventually become more automated and self-administered. And while granular benchmarking is probably still a few years away, significant value can nonetheless be derived in terms of talent and performance improvement.
Does the ROSMA Performance Check include cost avoidance?
ROSMA does not include such cost avoidance as avoiding or mitigating market price increases, or savings against inflation indices. Soft benefit information is requested in the questionnaire but because it is hard to measure it is not included in the ROSMA score calculations. However, anecdotal comments about soft benefits are available to users.
Can the results be drilled down to a specific level?
A chief procurement officer can use ROSMA to demonstrate to other CXOs, such as a chief financial officer, savings achieved through the procurement team’s efforts, and thus the value the team creates. The results of the team’s efforts are validated, a scorecard is kept, and the scoring method is presented in a familiar and intuitive context for the organization’s business and financial leaders.
During the pilot process, much of the true management and leadership value is identified as a result of insights gained from the performance drivers of ROSMA. For tactical evaluation, insights must be drilled down into spending pools and categories, but ROSMA is not trying to address this directly.
Are other tools available to support the Performance Check?
Other assessment tools that supplement ROSMA are available through A.T. Kearney and other companies that explore capabilities and practices. ISM and CIPS also offer additional resources.
Measuring the Value of Procurement
The value delivered by procurement is one of the key factors in overall profitability and operational efficiency. We believe it is important to raise procurement’s perceived value, both outside and within the profession, and to that end A.T. Kearney, ISM, and CIPS are working to ensure that the ROSMA Performance Check remains accessible and easy to use. We will continue to improve the Performance Check questionnaire to ensure that measurement is accurate and reflective while allowing users to compare results.
The ROSMA Performance Check is a powerful instrument for measuring procurement’s value, and we expect it will continue to gain advocates among organizations seeking to improve the performance of procurement and supply.