Beyond the Traditional SRM Scorecard: Supplier Management Metrics to Diagnose Your Supplier Management Operations (Part 1: Search and Enablement) [PRO]

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In recent years, prominent procure-to-pay (P2P) providers have increasingly offered opt-in peer benchmarking capabilities. This newly available data has changed the way consultants and advisors evaluate procurement performance. Benchmarks and key performance indicators (KPIs) once analyzed on a periodic basis, for instance, are now becoming embedded into procurement processes and continuously updated with new information as it becomes available.

Because of this, procurement organizations are becoming increasingly aware of the benefits measuring performance based on a standard set of benchmarks and KPIs can bring to overall P2P performance. Yet the same cannot be said of supplier management activities, despite the significant cost and risk they pose to procurement. In fact, Spend Matters has found that most procurement organizations are not yet measuring a complete set of KPIs to manage the lifecycle of supplier activities and associated supplier information. Solution providers have not helped this situation, either, instead glossing over supplier management in favor of KPIs and peer benchmarking services in core transactional procurement areas.

It’s time to change this. To give procurement organizations operational metrics that mirror the KPIs available in P2P, this multipart Spend Matters PRO series provides an action guide for measuring and quantifying some of the benefits of “day in the life” operational supplier management activities. It also provides a roadmap and foundational input for building a business case to support these initiatives, including investments in dedicated technology solutions and tactical KPIs for managing them.

Part 1 of this series offers diagnostic KPIs for self-assessing supplier search and enablement performance. For each metric, we include commentary and insight on why it matters to procurement, guidance on enablement and measurement, suggestions for procurement technology systems that can be used for support and variable inputs for tracking.

We also encourage all Spend Matters readers, including non-Spend Matters PRO subscribers, to download our recent 2017 landscape definition and overview on supplier management and supply risk management, which provide details on the different technical components of these solution areas.

For full access to this PRO content: