Performance Management Process: How to Guarantee Results that Create Value
What is procurement management?
Procurement management is the process of running a procurement team in a programmatic way that capitalizes on its contribution and value to the organization. While Procurement management can involve many factors, it typically revolves around strategic direction setting and guiding the team to accomplish Procurement’s goals.
Understanding procurement management process steps
Maximizing a procurement organization’s performance is easier than it seems, even at large scales. In general, teams simply need a transparent way to manage projects and track their results—the rest will often follow naturally. Below, we’ve outlined a step-by-step process you can follow to begin managing performance like a best-in-class organization.
Expected results
Procurement management usually looks like the Wild West. Every team, business unit, and category has its own rules and project tracker. No two teams really know what the other is doing and the CPO has only vague ideas of what Procurement is achieving as an organization. To stakeholders and executives, Procurement as a whole is a black box that occasionally produces reports. This is one of the reasons other functions don’t work well with Procurement.
But centralizing all Procurement’s projects into a single source of truth creates one pipeline that everyone in Procurement can use to align projects, collaborate across teams, share resources, and communicate with stakeholders. The CPO can forecast results and pivot resources instead of setting a goal and hoping everything works out. At the top, executives like the CFO can factor in savings and spend data when managing resources and forecasting financial performance. Overall
Below, we’ve detailed specific results that independent research firm Hobson & Co. found when interviewing SpendHQ customers about how they use our Performance Management module.
Faster project tracking and statusing
Moment-by-moment oversight of the entire function’s projects decreases the time that teams spend tracking projects and communicating statuses to stakeholders by 60%.
Nearly eliminate ad hoc report requests
Giving stakeholders and executives direct access to Procurement’s project pipeline, savings reports, and goal trackers reduced disruptive reporting requests by 90%, allowing leaders to focus on management instead.
Flexible resource allocation
Top-down visibility into Procurement’s pipeline saves 30% of the time teams spend gathering project details and assigning resources to them. Additionally, teams can pivot and reassign team members 30% faster.
Easier savings validations with Finance
Pairing the most important financial and performance data in one system cuts reporting effort and timelines in half.
Significantly higher savings
Centralized management allows teams to invest in operations and keep the entire team working toward a common goal. Better execution is a natural result, which increases savings by 50%.
Altogether, Hobson & Company found that these benefits add up to 814% solution ROI in only three years—with value continuing to grow in the future. For the full breakdown, read their independent report.