Hackett's P2P Performance Study: The Best Freemium P2P Benchmark in the World

My alma mater, The Hackett Group, has launched their bi-annual Purchase-to-Pay benchmark study. Unlike other free “benchmark studies” in the market which are 20-30 minute survey polls with sketchy data quality, the Hackett P2P benchmark study is in fact a “freemium” version of its full P2P process benchmark that uses the same general methodology as the flagship Hackett procurement functional benchmark that generates the venerable Hackett “world class” benchmarks, except that in this case it’s a “top performer” peer group that is essentially world class for just P2P performance.

What this means is that you get:

  • A true apples-to-apples comparison on the efficiency aspect of the study because of Hackett’s unique approach to collecting FTEs (and wage rates) based on its strict process taxonomy – no matter where the FTEs report. By then applying the resultant cost pools against relevant volumes for transactions, spend, suppliers, items, etc., the resulting normalized KPIs are then used for comparisons. This is a highly superior approach then using a department budget as the cost pool for such calculations.  For example, dividing the procurement by the number of POs is a very stupid way to calculate a comparable and relevant “cost per PO”
  • Data validation that is performed (users will get automated and human follow-ups to ensure their data is complete and accurate) to ensure high data quality
  • A strong “balanced scorecard” of overall P2P performance. The top quartile performers are determined via a weighted scorecard of the P2P KPIs, and are deemed “top performers.” For companies that want custom peer groups or multi-division/entity comparisons – as well as individual readouts and recommendations – that requires a premium version of the benchmark
  • A webcast presentation going through the results that share not only the KPIs for top performers vs. the non-top-performers peer group, but also the related best practices adoption for these 2 groups to help net out which practices are making a difference.
  • The benchmark report (in the form of a slide presentation) also breaks out results into both procurement and payables areas so that those individual groups can review their relevant metrics.

If you're an interested company, I would highly recommend getting AP and Procurement to participate in the study to maximize sample size, data quality, and the organizational value that you’ll get from it.

A word of warning though: this is a non-trivial effort! It takes at least a few hours to collect all the data you’ll need to participate (and don’t sign up for it unless you’re serious about doing it – you’ll be relentlessly hounded by a very nice team to get it completed).  But, in return, you will be rewarded with a study that will give you highly targeted insights with data you can trust.

Also, the questionnaire can be printed beforehand, there’s plenty of help-text, and Hackett now uses Qualtrics as a survey tool (the best survey tool that I’ve seen – although somewhat pricy) to make the experience more user friendly.

*Note: Registration is required and will get reviewed before a study link is sent (in order to sift out non-practitioners). If you want to see example output, there are abridged results presentations from the 2011 and 2009 studies out on the web if you look for them, but the latest installment adds some deeper insights regarding guided buying, the expansion of Purchasing’s role, and technology strategy. If you want to see an example of the type of data you'll see, here is a Hackett presentation from a SIG event that gives a good flavor for the output.

The study will be open until early July and results will be available in September.

Bottom-line: if you’ve never done a P2P deep dive benchmark, and want a freemium option (and are willing to invest the time to do it), the Hackett P2P study is an absolute no-brainer.

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