Companies ‘Don’t Realise Value of Procurement’
Only one in 10 chief financial officers (CFOs) have been engaged successfully and recognise the value and contribution of their procurement team, while measurement of procurement value is not uniform suggest a survey.
The inaugural return on supply management assets (ROSMA) performance check report, entitled ‘Building the Brand of Procurement and Supply’ is a combined initiative from three organisations – AT Kearney, The Chartered Institute of Purchasing & Supply (CIPS) and the Institute for Supply Management (ISM), to bring common value management visibility and practices to the procurement profession.
The report found that leading procurement teams deliver significant value to their organisations, but without a credible standard allowing companies to consistently track and score procurement performance, many CFOs question the performance of and benefits delivered by their procurement teams. Only 10% of procurement functions have established recognition with their CFOs over how procurement contributes value and that the benefits are real and measureable.
“There are many opportunities to change the brand of procurement across the profession, within our enterprises, and to attract, develop, and sustain best athlete-calibre talent. Adopting value management practices is necessary for the future.,” said Joe Raudabaugh, AT Kearney partner and report co-author.
David Noble, group chief executive officer (CEO), CIPS, noted: “There is no doubt that the profession has to be seen as supporting the strategic aims of the enterprise and to have relevance to its goals and success. We must be able to demonstrate value in a quantitative way.”
Among the report findings: