Building a
Bolder Legacy
The Procurement Mission Is Under Way
The call for procurement to create and manage for
value is becoming more intense. Will the profession
more broadly seize the opportunity?
Building a Bolder Legacy: The Procurement Mission Is Under Way
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Some CPOs have established procurement as a critical source of strategic
enterprise value, more can and will. Some CPOs have earned not just a seat
at the table but also an integral role in their organization’s leadership narrative,
more can and will. Some CPOs have successfully positioned procurement as
a preferred career platform for top talent, more can and will. The mission to
position procurement boldly is underway.
In every industry and in companies of nearly every size, procurement has the potential to
perform consistently and produce predictable, usable results, if only the profession will seize
the opportunity to do so. While there are stellar examples of procurement organizations setting
a strong standard for performance excellence, the gap is wide and growing between these firms
and most others in their profession.
Closing this gap comes down to clear choices by CPOs and their staffs. The call to create and
manage value is becoming more intense as companies continue to search for sources of value
(savings and innovation), recognize the competitive gaps in procurement performance, and as
zero-based budgeting (ZBB) becomes a more widely embraced management tool.1 Management
will either ask what value it gets from procurement (pull), or procurement will proactively advance
value management on its own (push) and share its success stories.
Strong CPOs will capitalize on their command of this area and partner with CFOs in an effort
to establish or sustain world-class procurement. CPOs who fail to establish a well-defined and
respected position for themselves and their departments risk becoming note-takers to the
primary players in organizations that adopt the ZBB process. Also, as procurement needs
talented individuals to rise through its ranks, the best of young talent are millennials—a generation that prefers to join organizations with value-management practices, specifically where
there is transparency, accountability, and recognition of their achievements.
Procurement faces a transformational period, similar to what other corporate disciplines have
faced in the past 30 years. Beginning with manufacturing in the 1980s, and moving on to supply
chains, research, engineering, and more recently sales and marketing, the mission for procurement organizations is underway—whether procurement is ready or not.
The 2015 ROSMA Performance Check
This paper discusses findings and analysis in the 2015 Return on Supply Management Assets
(ROSMASM) Study. ROSMA is the performance management standard developed and administered by A.T. Kearney with the Chartered Institute of Procurement & Supply (CIPS) and the
Institute for Supply Management (ISM). This year’s findings indicate that now is procurement’s
time to become visible, measured, and monitored. How this happens is in procurement’s
hands—at least for the moment.
For this year’s ROSMA Performance Check, we gathered feedback from hundreds of companies
in order to share perspectives on both recent and cumulative benchmarking periods. The
insights are powerful:
ZBB is an accounting approach that requires all business stakeholders to justify their resources and spending every year, starting from
zero or a clean-sheet perspective.
1
Building a Bolder Legacy: The Procurement Mission Is Under Way
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• Top-quartile performers continue to deliver hard financial benefits in excess of 7.5 times
their costs and investment base in procurement. This group slightly improved over the prior
reporting year, with most delivering double-digit (10 to 15 times) returns, but still within the
range of norms identified since benchmarking began in 2011. These leaders generate about
$1.25 million in financial benefits per procurement employee per year. More than 25 percent
of their benefits come largely from applying advanced methods to unlock value beyond unit
cost reductions (for example, through asset productivity gains, complexity reduction, and
clean sheet redesign). This group delivers the best performance across all procurement value
drivers, with some of the most efficient operators that have driven their cost-to-serve to well
under 50 basis points as a percent of spend.
• Middle-tier performers are consistently accretive, with most generating three to five times the
investment and costs of their supply management assets, including people and technology.
But these mid-tier firms have not materially improved their productivity since tracking began
in 2011, and while their performance dropped slightly this reporting year, it remains consistent
with historic norms. This group has some visible success with advanced methods, but lags
leaders across all drivers and most notably on velocity, yield, and cost. They are less efficient
operators.
• Among CFOs and the finance community, 50 percent believe that bottom-quartile procurement teams return less than 1.5 times their cost in value. Indeed, CPOs from the bottomquartile teams validate this perspective, reporting dilutive performance results, with financial
benefits insufficient to cover their activities. This year, they noticeably lag the middle-tier
performers on yield, compliance, and cost. Historically they trail across all drivers versus
the other performance segments. These companies do not report any material results from
advanced methods and will require radical transformation to close the cost-efficiency gap
with middle and top performers.
• Performance varies widely across all of procurement’s key value drivers—spend coverage,
sourcing program velocity, sourcing project yields and outcomes, compliance rates, and
operating costs—regardless of company size, industry, or spend mix. Although organizations with more mature or advanced practices have less variable performance with some of
the value drivers, even top performers are missing substantial opportunities for productivity
improvement. Procurement remains a function plagued with inconsistent performance in
delivering strategic activities.
• Also within the CFO and finance community, 71 percent report that procurement lags most or
all other functions in terms of the rigor and depth of performance tracking. Only 20 percent
report that their procurement organizations have very clearly defined, well understood, and
widely respected performance metrics.
• Also, 31 percent of CFOs and finance leaders indicate that procurement results that are
reported are widely accepted, but 69 percent reveal that their results are sometimes,
frequently, or always challenged. Furthermore, only 16 percent say they see at least 70 percent
of the contracted savings reported in their financial results, more than 57 percent indicate
that they see less than 50 percent of the benefits or have no idea what is realized.
• Improving one’s ROSMA performance modestly—say from below average to above average—
can increase EBITDA by 4 percent for most organizations. Transformative improvements,
moving a bottom-quartile performer to the middle of the pack, or an average performer to
the top quartile, can deliver on average more than a 10 percent increase in operating results.
Building a Bolder Legacy: The Procurement Mission Is Under Way
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Metamorphic transitions from bottom performers to the top quartile, although rare (organically), can raise EBITDA 20 to 30 percent. Even today’s top-quartile performers have potential
high-impact opportunities, simply by managing what they do more consistently across all
value drivers rather than spiking on a few, as is the case for most. Actual performance improvements documented by this year’s ROSMA Performance Check help explain why synergies
from procurement after M&A, and a focus on procurement by the internal consulting
resources of PE firms, have become routine (see sidebar: The Procurement Performance
Improvement Journey).
In the inaugural 2014 ROSMA Performance Check, Building the Brand of Procurement and
Supply, we advanced the discussion of the need for procurement to embrace value management, adopt the language of finance, and secure a working partnership with the CFO community
to drive results together. We shared telling research on procurement performance from the
voices of both CPOs and CFOs. The disparate levels of performance reported by procurement
and perceived by finance painted a clear picture of a profession that has not yet shaped a
consistent or strong brand message. The good news is that some procurement organizations
have built high-value brands and we can learn from their accomplishments. As this series of
annual updates unfolds, we hope to highlight and celebrate the success stories and, ultimately,
to also report that the procurement profession’s brand is strong and getting stronger.
In this year’s report, we continue to share updates of the ongoing benchmarking of value
delivery in procurement along with our Voice of the CFO and Finance Community research,
which was also updated and expanded in 2015. This paper contains validating insights from
leading practitioners who share their perspectives on brand building.
The Procurement Performance Improvement Journey
The TPG Operations Team
TPG is a leading global private
investment firm with approximately $75 billion of assets under
management that includes both
investment and operating
professionals. Its operations team
supports multiple functions and
capabilities to help manage and
improve the performance of the
companies in which TPG invests.
As part of the operations team,
the TPG procurement team is a
global, strategic function that
supports all levels of transformation and optimization across
TPG’s portfolio companies.
Several years ago, the procurement team developed a process
to collect key data from the
portfolio companies for use in
ascertaining the health and
performance of their
procure-ment functions. The
team begins with an assessment
to determine both the financial
performance and organizational
maturity of people, processes,
and tech-nology. Financial
performance data and selfassessed maturity surveys are
collected annually or when a new
company is added to the portfolio.
Once the baseline is set, TPG and
the new company agree on a
three-year strategic road map to
drive improvements in all areas.
Performance of the portfolio
companies is continually
monitored and managed through
leveraged programs, monthly
CPO calls, an annual CPO
meeting, and performance
reviews. The procurement teams
track year-over-year performance and monitor their organizational journeys on a matrix that
is plotted annually and discussed
collectively. The CPOs are able to
share best practices for how they
have improved their organizational performance. “Ultimately,”
explains one CPO, “it’s not about
where you are on the matrix, it’s
about where you are going and
how you get there.”
Since launching the process,
TPG has seen measurable
improvement in traditional
procurement key performance
indicators, including spend under
management, savings delivery,
and EBITDA. Perhaps most
important, the strategic standing
of procurement in TPG’s portfolio
companies has taken a strategic
step up. Procurement is now
considered a vital contributor to
delivering sustainable results.
Building a Bolder Legacy: The Procurement Mission Is Under Way
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For those new to the ROSMA discussion, a detailed description of the framework can be found
on page 8 of last year’s report, Building the Brand of Procurement and Supply, or explore the
framework and topic in detail on any of our websites (CIPS, ISM, and A.T. Kearney). This year’s
ROSMA Performance Check research update, includes the following:
2015 Research Insights. Presents current and cumulative ROSMA benchmarks and insights
from the companion research, Voice of the CFO and Finance Community.
Value Management-Driven Procurement. Illustrations of the impact of applying value
management practices to drive procurement performance.
Transparency and Recognition. Expectations of millennials and the imperative for enhanced
performance management practices.
Validating Perspectives. Leadership practitioners share their stories and perspectives from
their value management experiences.
Appendix. Additional data to support individual study findings.
Procurement’s mandate is multi-faceted and about much more than the value management
mission. It is about “keeping things running,” sustaining core hygiene activities such as buying,
securing innovation from the supply base, and overseeing risk management. But the narrative on
value has been growing louder and spreading wider across many forums: Procurement remains a
function in search of improved performance, consistency, and more predictable results. Actively
embracing the procurement challenge is the only pathway to professional survival.
The narrative on value is growing louder…
Procurement is a function in search of
improved performance, consistency,
and more predictable results.
2015 Research Insights
We employ two complementary research platforms to provide an objective view on the value
created by procurement: 1) ROSMA Performance Check Benchmarking collects the financial
performance of procurement as reported by participating CPO organizations, and 2) Voice of
the CFO and Finance Community documents the views of CFOs and their finance counterparts
regarding the performance of their procurement organizations.2 ROSMA benchmarking has
been ongoing since 2009, while the CFO and finance community research began in 2014 and
is updated annually. To date, and again this reporting year, there is overwhelming alignment
of these two views, which we present later in this paper.
First, some background on the two research platforms:
ROSMA benchmarking. Cumulatively more than 1,000 companies have started the ROSMA
process, which A.T. Kearney first piloted in 2009 with dozens of co-development and concept
Views of the CFO and finance community are drawn from contracted independent panel research.
2
Building a Bolder Legacy: The Procurement Mission Is Under Way
4
review clients. We are aware that many others have adopted the framework and we are
monitoring their progress independently of the formal benchmarking mechanisms available
from CIPS, ISM, and A.T. Kearney.
Interestingly, not all surveys once initiated are completed. In a follow-up to learn why, most say
it is because they do not track or know the critical performance data required. This implies that
the bottom-quartile performance group is actually substantially larger.
More than 800 companies have technically completed their benchmarking surveys. However,
in a thorough qualification process, submitted data is checked to ensure that it makes sense.
If responses are questionable, participants are asked to verify the authenticity and accuracy of
the data and are given an opportunity to refine their answers, which are again validated. After
the verification step, the data is accepted when it is within stretch ranges that we believe are
rational and possible; ranges are based on A.T. Kearney observations from extensive client work
and are consistent with other research sources on metrics common to those within the ROSMA
framework. Our cumulative database now has more than 520 completed, qualified, and accepted
benchmarking surveys. For this report, insights are drawn from 168 completed, qualified, and
accepted submissions, accepted since last year’s edition, as well as the cumulative data set
providing substantial depth and coverage.
The CFO and finance community. Research was conducted in March 2015 by Research Now
Inc., an independent market research firm. Research participants were qualified in advance to
ensure they have direct responsibility for financial resources and activities, are in a financial
management role at the controller/director level or higher, and/or have oversight responsibilities for finance but with a broader senior-level mandate, for example at the CEO, COO, or
President level. A total of 226 qualified respondents from Australia, France, Germany, the UK,
and the United States participated in the survey. Participants represent companies larger
than $500 million, with 42 percent of participants at $10 billion companies and larger. Of the
participants, 45 percent are in executive positions (VP, SVP, EVP, CFO, or CXO) and 55 percent
are in director and controller positions. The 2015 survey is an extended version of the 2014
survey as it includes some additional questions. The growing CFO and finance community
research comprises 384 unique voices and is based on answers to 20 questions. The answers,
segmented by procurement performance perceptions, fall into five discreet profiles—from the
brand Leaders and Leaners to the Strugglers and Inconsequentials and finally to those that fall
into The Pack (see figure 1).
Figure 1
Procurement performance as observed by the CFO community
Inconsequentials
12%
Strugglers
12%
The Pack
55%
Leaning Up
12%
Brand
Leaders
9%
Source: A.T. Kearney analysis
Building a Bolder Legacy: The Procurement Mission Is Under Way
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From Brand Leaders to Inconsequentials
Brand Leaders are procurement teams in excellent shape and position. Their results are
validated and widely accepted across the key procurement value drivers (including influenced
spend, spend sourced, yield, and compliance), and their finance colleagues see them as having
well-defined metrics and performance that extends to leadership thresholds. Finance knows
what world-class procurement looks like and believes its procurement team ranks up there with
the best and shows it by periodically inviting procurement leaders to financial analyst briefings
to share their results. Ninety percent of the finance community is able to specify what portion
of the savings secured by procurement is identifiable in their financial results. Procurement has
all the right answers on all the key questions (see sidebar: Communicating and Delivering a
Stronger Brand).
Communicating and Delivering a Stronger Brand
Thomas Weill
CPO, Campbell Soup Company
The Procurement profession has
changed significantly in the past
few decades. Some changes are
welcome, while others have
created frustration in our industry.
Case in point: Who among us can
relate to questioning whether our
team’s efforts and results are truly
valued? We know that procurement is a complex and often
misunderstood art in need of
more science. While art is in the
eye of the beholder, science
deals in facts. To introduce real
change in the conversation about
procurement, we must embrace
more of the science and rethink
our engagement practices and
storytelling, reviewing them from
an “outside in” perspective.
I am proud that at Campbell, my
team has embraced some of the
needed science. We have upped
our game on analytics, and
embraced value management
practices in our approach to
spend management. Seeing our
work efforts, messaging, and
results through the lenses of
our finance and business stakeholders has helped us become
better partners, deliver better
results faster, and improve how
we communicate and engage.
We have delivered on the promise
of supplier-driven innovation—
the necessary table stakes of
cost reduction—and the intangibles of risk management.
Working more collaboratively
with our business partners allows
us to communicate exactly what
procurement is capable of doing,
which is well beyond cost cutting.
By discussing activities and
outcomes in the language and
metrics of our executive stakeholders, we have created a more
inclusive environment, with
greater respect for our work, our
team, and procurement’s role in
addressing critical business
needs.
I am convinced that a strong staff
with solid capabilities is critical,
and will help our stakeholders
understand how we add value.
But brand-building skills are
also necessary and will help our
function gain more respect in the
marketplace. We should learn to
market procurement and manage
our function as a brand.
Recently I participated in a terrific
branding workshop of CPOs.
The facilitator challenged us to
identify our internal and external
“audiences,” the people we must
satisfy and build trust. We came
up with a list of 30, but then
focused on two: a CFO and a Gen Y
procurement professional. We
made these people “real” by
developing their profiles and
documenting their biases,
concerns, needs, and expectations. And we role played their
conversations about procurement. Through this exercise we
learned that many of us already
have the skills needed to develop
and deliver strong messages. We
can inspire our talent to do great
in procurement, involve stakeholders in the critical mission,
and communicate the value of
our results. By recrafting the
storytelling and discussing
our perspectives and results in
a language they recognize, we
signal a shared understanding
of the business needs and
priorities of our executive
audiences.
Communicating great results
more effectively will serve the
profession well. Imagine stakeholders who understand our
value and what we do, and who
celebrate our people’s service
and contributions. Now, that’s
priceless!
Building a Bolder Legacy: The Procurement Mission Is Under Way
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Procurement teams in the Leaning Up segment have built strong reputations and are nearing
the prestige levels of the brand Leaders. Together, Leaders and Leaners are well established and
viewed favorably by nearly 21 percent of the finance community, a percentage that is substantially higher than reported in 2014.
Conversely, Strugglers are perceived to be only marginally more effective than Inconsequentials.
Procurement teams that disappoint, are not respected, and in some cases are almost invisible
to the CFO and finance community fall into these two segments. Scoring did not go well for
them as the finance community does not believe they have accountable leadership. Their performance metrics are unclear or not established, their results are frequently or always challenged,
and finance either does not know or reports substandard performance levels on their procurement value drivers.
When describing the Strugglers and Inconsequentials, finance either claims it knows what worldclass procurement looks like and that its company does not have it, or wants to know what it looks
like and what value it could bring. For this segment, finance either believes that procurement
realizes less than 50 percent of the savings that it claims to have contracted and secured, or it just
doesn’t know what procurement realizes, if anything at all. The Strugglers and Inconsequentials
have established this weak brand position with almost 25 percent of the finance community.
Everyone else, or The Pack, is the largest identifiable segment at approximately 55 percent. This
segment’s reputation with finance ranges from slightly better than the Strugglers to almost as
strong as the Leaners, and everywhere in between. Finance has at least some credible awareness
of these procurement teams, on a few critical assessment questions. Yet, while there is less
ambiguity about the value that these teams deliver, the dimensions and capture levels are well
below those recognized by the Leaders and Leaners. In short, The Pack is in the game but has
not yet established a reputation for being strong and consistent performers.
The performance scores that CPOs report in the 2015 ROSMA benchmarks are consistent with
the finance community’s views (see figure 2).3
The top-quartile ROSMA leaders report performance levels that deliver a minimum ROSMA of
7.5 and an average ROSMA of 12.7, which is slightly higher than last year. The leaders deliver a
return of more than 7.5 from procurement activities, which is consistent with the calculus
shared by the finance community associated with brand Leaders and Leaners. Likewise, the
Figure 2
ROSMASM performance reported by CPOs
Bottom quartile
ROSMA <1
Middle 50%
ROSMA ~4
Top quartile
ROSMA >7
Source: A.T. Kearney analysis
Reporting took place in the 12-month period from August to August.
3
Building a Bolder Legacy: The Procurement Mission Is Under Way
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bottom-quartile ROSMA performers report a maximum ROSMA of 1.7 and an average ROSMA
of 0.8. These scores confirm that this group is economically dilutive, which mirrors the finance
community’s assessment of the Strugglers and Inconsequentials. The middle 50 percent
ROSMA segment is adding value, but slightly less than the prior year. All three performance
segments are consistent with historical norms (2009 to date). And again, CPOs provide a
performance view that independently validates the perceptions of the finance community.
Performance variability exists across all industries and is largely independent of a company’s
size. To date we have found minor differences in the average ROSMA performance levels by
industry and relatively high variances within all sectors (see figure 3).
The average standard deviation of ROSMA scores across these sectors is more than 4.0 and
the average relative standard deviation is 88 percent. All industries have procurement organizations represented across the performance tiers. Applying the same analytical view to ROSMA
Figure 3
Value improvement potential exists in all industries
ROSMASM average and std dev by industry
16
Average ROSMA
14
+/– 1 std dev
12
10
8
6
4
2
0
Other
Automotive
Building materials
Financial institutions and insurance
Transportation services
Food, beverage, and nutrition
Chemical, oil, and gas
Utilities
Financial institutions and banking
Industrial equipment
Retail
High-tech
Construction services
Telecommunications services
Pharmaceuticals
–2
Source: A.T. Kearney ROSMASM Benchmarks Database 2011–2015
Building a Bolder Legacy: The Procurement Mission Is Under Way
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performance by size of company (revenues), the average standard deviation across the tiers
(for example, $500 million to $1 billion or $1 billion to $5 billion) is 5.0 and the average relative
standard deviation is 95 percent. Although the average ROSMA score by tier size has escalated—
from approximately four to six—larger organizations have high performance variability (std dev =
4.7) like all tiers. This variability increases absolute risk, as the higher associated spend levels of
larger companies either further magnifies or further leverages the performance-value gap.
It is critical for the profession to understand what creates wide-ranging procurement performance, delivers financial results, and bolsters procurement’s reputation with the CFO and
finance community. And, we must take these insights one step further by exploring what can
be done to secure more consistent and improved outcomes. As noted in last year’s report, we
find that maturity (including the breadth and depth of capabilities, processes employed, and
management practices) is the strongest indicator of ROSMA performance. Better practices,
skills, and manage-ment processes deliver stronger and more consistent outcomes. Procurement
organizations that address the following issues are better positioned to deliver results and
sustain strong reputations:
• What hard, tangible value can procurement deliver to the business?
• What spend areas are affected?
• What’s the strategy? Why will it improve our position?
• What resources and capabilities are needed?
• Is there an engagement model and milestones for collaboration between procurement and
business partners?
• What is the validation and forecasted timing of benefits? How will these impact the budget?
• How are we doing, what do we need to adjust, and what’s next?
The ability to address these types of issues determines how effectively a company handles the
“how” of procurement—what is done, how it is done, and the outcome. The variability at this
level of the game drives the variability that we see reported and observed in performance.
ROSMA captures performance against the core value drivers shown in figure 4.
Figure 4
An array of variables affect ROSMA core value drivers
Spend
coverage
Velocity
Category
yields
• Spend
governance
• Number and
mix of sourcing
events
• Sourcing
processes,
methods, and
capabilities • Spend
visibility
• Sourcing project
cycle time
• Project pipeline
management
• Sourcing
strategies
and targets
alignment
Compliance
Additional
benefits
Period
costs
Structural
investment
• Policy
• Advanced methods
employed
• Roles, mix,
and rates of
people
• Technology
and process
infrastructure
• External
support
• Capability
investments
• Visibility
• Enforcement
• Increased scope
and agenda
(specifications
and requirements,
balance sheet,
business portfolio)
• Supplier-enabled
innovation
Source: A.T. Kearney analysis
Building a Bolder Legacy: The Procurement Mission Is Under Way
9
Those results are indicative of how well and consistently procurement executes its game. For
example, the quality of delivery and relationships will affect the level of engagement (such as
how spend is addressed and how frequently procurement can partner to source). The capabilities, skills, and tools procurement has can affect its projects’ outcomes (including yield and
additional benefits). The technology, process, structure, and talent mix that procurement
employs affect its visibility, speed, compliance, and functional costs. Clearly, the broad level
of play in the procurement profession is responsible for the mixed results delivered.
Variability of play is significant. Figure 5 presents the range of relative standard deviations for
the key ROSMA value drivers, reflected in the time periods within the benchmark library (2009
to date). We believe that few organizations are actively managing their procurement processes,
which is why we observe these results across the profession today.
Figure 5
Procurement performance variance by value driver
Coefficient of variation (CV)
or relative standard deviation (RSD)
Overall ROSMASM
90% ~ 95%
Spend influenced (%)
34% ~ 37%
Velocity (%)
35% ~ 38%
Yield (%)
75% ~ 110%
Compliance (%)
22% ~ 30%
Cost (% of spend)
110% ~ 150%
Additional benefits (% of total savings)
100% ~ 400%
Notes: Coefficient of variation (CV) is a standardized measure of dispersion of a probability distribution or frequency distribution.
Velocity % is the % of influenced spend that was addressed
Source: A.T. Kearney analysis
Questions and answers from the CFO and finance panel research in figure 6 on page 11 offer
further validation of the substantial variability in procurement engagement practices, effectiveness, and results that impact value delivery. There is a vast difference in the level of play
between the Inconsequentials and Strugglers and the Leaders and Leaners, which is consistent
with the implications reflected in the CPO-reported ROSMA value drivers.
When activities and results are measured, behaviors change. Leaders and Leaners may not be
fully engaged yet in value management, but they are fully engaged with finance. Figure 7 on
page 11 shows how challenged the Inconsequentials and Strugglers are to earn respect, while
Leaders and Leaners are either fully engaged in their performance and celebrating the results
or engaged objectively on the challenges.
Building a Bolder Legacy: The Procurement Mission Is Under Way 10
Figure 6
There is a vast difference in the level of play between the Inconsequentials/Strugglers and
the Leaders/Leaners in the eyes of the CFO community
Inconsequentials
and Strugglers
Is the hard savings rate secured by
procurement-led and procurement-supported
market-tested events tracked?
We keep track and validate all
savings from all sourcing projects
I know only for the events that
procurement wants to share
Leaders
and
Leaners
11%
85%
26%
13%
I know only for big or high-profile bids
19%
I don't know
28%
We don't track
15%
What percentage of your external spend is
actively influenced by your procurement
organization directly, or in collaboration, with
business partners? By this, we mean more than
supporting "buying" or procure-to-pay activities, the procurement team actively develops
strategies for and/or with the business teams
around categories of spend and supply markets.
1-45%
53%
23%
46-65%
13%
28%
8%
43%
I am unaware of the
approximate percentage
26%
6%
What percentage of the spend that
procurement does support is actively
sourced or market tested each year?
1-40%
38%
6%
41-50%
13%
17%
51-60%
8%
23%
61-75
2%
15%
66%+
76%+
What percentage of the “contracted”
savings (what you should get to keep and
see in your financial performance results)
from procurement-driven and supported
award decisions are actually realized
(i.e., compliance)?
2%
30%
I am unaware of the
approximate percentage
40%
0-50%
42%
4%
51-60%
9%
26%
61-70%
6%
26%
71-80%
4%
81%+
9%
15%
26%
I am unaware of the
percentage
40%
4%
Source: Research was conducted for A.T. Kearney by Research Now (an independent market research firm) between March 5-12, 2015
Figure 7
Inconsequentials/Strugglers are challenged to earn
respect with the finance community
Inconsequentials
and Strugglers
How would you compare your understanding
and tracking of procurement performance
(team and individual) relative to other key
operating functions?
Leaders
and
Leaners
Robust, comparable to the best of
other key functions in terms of breadth,
depth, and accuracy; great visibility
11%
70%
We have some visibility into their
activities and how they are doing but
it is not at the same depth and does
not command the same level of
interest as other functions
51%
30%
Don't know or not sure
26%
Not interested so would not know
11%
Source: Research was conducted for A.T. Kearney by Research Now (an independent market research firm) between March 5-12, 2015
Building a Bolder Legacy: The Procurement Mission Is Under Way 11
Value Management-Driven Procurement
A CPO-CFO partnership is core to procurement-driven value management, especially when the
partnership is characterized by the right tools, visibility, performance reporting, language, and
collaborative engagement. A strong CPO and CFO partnership is built on several foundational
elements, including access to and ability to leverage the same information, alignment on metrics,
and parallel meetings converted into rich three-way conversations—among procurement,
business owners, and finance. Such partnerships establish credibility in managing procurement
resources more consistently, and go a long way to improve and sustain value-driven performance
(see sidebar: BFF: You and the CFO).
BFF: You and the CFO
Diedra Merriwether
Vice President, Finance and CFO
Americas, W.W. Grainger, Inc.
The head of finance and the head
of procurement are two very
different roles. The CFO is often
a trusted partner and advisor to
the CEO, often helping to run the
company, advising on strategic
transactions, M&A, and shaping
the financial narrative. In contrast,
the CPO is frequently a member
of the team—known as a savvy
negotiator and cost cutter, but
unfortunately not often in the
starting lineup. Having had rich
experiences in both finance and
procurement, I believe there is an
opportunity to establish a more
consistent presence and stronger
platform for procurement.
Procurement done well is more
than a frontline battle for
improved value from the supply
base. An effective procurement
team understands the behaviors
at play within the organization
and also the possibilities in the
marketplace—how we work and
what we could do. Bringing these
insights into decision-making
conversations, in the right way
and at the right moment, can
make or break the level of impact
that procurement provides.
Choreographing the engagement
of the business in partnership with
finance is critical to capitalizing
on procurement’s hard work. It’s
a collaborative partnership that
requires time to build, but once
working, it changes the game and
raises procurement’s stature.
If procurement establishes and
uses the language of finance—
demonstrating a clear appreciation for the drivers of value
and the results that affect the
accounting scorecard—then
the relationship can advance.
Once finance observes a shared
language and consistent
accuracy and provisioning of
facts, the CFO community will
be more open to learning about
the mechanics and challenges of
demand management, sourcing,
contracting, supplier management, and compliance.
Consider the possibilities. A CFO
who fully appreciates the procurement governance challenge, of
being responsible for outcomes
but not accountable or positioned
for managing behaviors, is more
apt to play a critical role in
improving governance. Further,
a CFO with a deep understanding
of procurement can nudge the
businesses to engage procurement earlier and more often.
When the sourcing benefits are
secured, the CFO can validate the
results and recast budgets and
forecasts to ensure faster and
better benefits realization.
Finally, who better than a CFO
to help procurement navigate
the occasional bumps with the
businesses by leaving open
the possibility of entertaining
new spending or investment
decisions, while simultaneously
securing the projected procurement benefits. This nuanced role
not only boosts procurement’s
credibility and performance
stature but also allows finance
to play an active role in managing
demand or quantity—thus bringing clarity to procurement’s
primary role in managing supplier
quality, risk, and value (price,
terms, innovation). Together, the
finance-procurement team is
better able to facilitate value
management with the business.
A strong CPO-CFO partnership
is built on mutual respect and
understanding of the value that
each brings to the table. While the
CFO is not the only relationship
procurement should build, it is a
necessary one. In fact, CPOs who
build rich relationships with their
CFOs are more likely to be in the
starting lineup, and an active
player in winning the game.
Building a Bolder Legacy: The Procurement Mission Is Under Way 12
Finance and the business enable procurement to play a bigger and more strategic role as
evidenced by higher levels of spend coverage, yields, savings credibility, and value from
additional benefits—all signaling broader engagement and mutual support. We estimate that
about 15 percent of companies today have these enabling behaviors and practices in place,
with another 10 to 20 percent close behind. We expect this uplift in effective CPO-CFO partnerships to accelerate as more CPOs self-select to adopt value-management practices (push) and
as more organizations adopt ZBB (pull).
ZBB strengthens procurement performance management by forcing three-way alignment.
Line-item spend management is integral to the process, with visibility, variance reporting, and
correction planning as primary features. Companies employing ZBB (such as 3G Capital and
AB InBev) demonstrate game-changing improvements in shareholder value performance by
forcing rigorous alignment on resources and expenses. More than 20 Fortune 500 firms have
publicly announced adoption of ZBB this year alone (including ConAgra, Kellogg, Campbell
Soup, American Apparel, and Coca-Cola), with many more to come.
CPO-CFO partnerships will accelerate
as more CPOs adopt value-management
practices and as more organizations
adopt ZBB.
Tony Milikin, CPO, AB InBev, says the beauty of ZBB is its transparency, noting that as finance
gets deeper into the weeds there is greater appreciation for the procurement team. “We know
the details, the behaviors, the costs, and we bring enormous value to the decisions,” Tony
explains. “If we come out of the ZBB process with more clarity around what procurement can
affect and where finance and our business partners must take ownership, then we’ve reached
a turning point of ‘P*Q’—that is, our procurement team manages price and value (P) and finance
provides oversight on demand management (Q). ZBB is an enabler for making a good
procurement team great, and exposing a weak procurement team as transactional.”
What will be the value impact from a stronger CPO-CFO partnership? How will procurement use
this opportunity to also strengthen its relationship with the businesses?
Every organization has a unique spend mix and scale. Some high-margin businesses or serviceintensive business models have lower relative levels of external spend, while others may be
much higher. Applying ROSMA benchmarked performance levels to three tiers of spend profiles
(industries with low, medium, and high levels of spend) allows us to simulate the impact on
EBITDA for three improvement pathway scenarios: (1) modest improvement—challenging an
organization that has slightly below-average procurement performance to become slightly
above average, or a C-/D+ report card becomes a B–/C+; (2) transformational improvement—
converting a typical bottom-quartile performer to average player performance; (3) “ok to great”
conversion—nurturing an average team to become a top-quartile performer.
In each case, high-spend organizations with improved procurement performance will see the
biggest jumps in EBITDA. As shown in figure 8 on page 14, a high-spend organization that falls
into the modest improvement scenario will see an 11 percent EBITDA improvement compared to
Building a Bolder Legacy: The Procurement Mission Is Under Way 13
Figure 8
EBITDA impact from improved value management in procurement
ROSMASM performance ladder
4th quartile
% change
in EBITDA
3rd quartile
2nd quartile
Transformative
4%–15%
1st quartile
Okay to great
5%–21%
Modest
2%–11%
Example: modest improvement pathway that EBITDA impacts
High-spend
organization
Medium-spend
organization
Low-spend
organization
Spend as % of revenue
Example industries
Earnings improvement
>= 75%
Auto; food and beverage
11%
30%> x <75%
Various
4%
<= 30%
Banking; insurance
2%
Source: A.T. Kearney analysis
a 2 percent improvement for a low-spend organization. Modest improvement scenarios should
be routine, as these organizations are expected to have some threshold level of procurement
capabilities upon which to build and drive results. By comparison, those in the transformational
improvement scenario require near-greenfield capability building to reach average performance.
The “ok to great” improvement scenario typically requires bold moves with a build-up of success
from applying advanced techniques and strong three-way partnerships (procurement-financebusinesses) in order to activate and deliver advanced methods programs. This scenario often
requires onboarding new capabilities and resources.
Transformative and ok-to-great programs deliver bigger, more robust EBITDA gains for all three
spend profiles. Obviously, sequential programs that move bottom-quartile performers up to the
top quartile will deliver blockbuster results that are either achieved organically with time or
quickly through consolidations and mergers.
While there is significant improvement potential within the existing ROSMA benchmark norms
for most organizations, the potential for top-quartile performers is still being defined. For
example, it is considered theoretical and unachievable to apply a “ruthless competitor” model,
which essentially projects a composite performance profile based on achieving the highest
benchmarks across all drivers. However, with discipline, why couldn’t a team deliver the 75th
percentile (a C+ academic performance) across all savings drivers (including coverage, velocity,
yield, compliance, and additional benefits) and deliver the 50th percentile (middle-of-the-pack)
on functional costs?
Building a Bolder Legacy: The Procurement Mission Is Under Way 14
Figure 9
Productivity gains for improved consistency of leaders
ROSMASM
score
Bottom 25%
The Possible:
“Consistently
Better Performer”1
Top 25%
12.5
0.8
17.6
ROSMA
Invested supply
management assets
Financial results
delivered
Spend
coverage
Velocity
Category
yields
Compliance
Additional
benefits
Period
costs
Structural
investment
Top-quartile performer on ROSMA
70.6%
76.2%
7.3%
90.6%
of spend is
influenced
of influenced
spend is
addressed
in year
savings
compliance
$1.29
million
0.3%
per
procurement
FTE2
procurement
cost as a % of
total spend3
1955%
–82.6%
Difference between top- and bottom-quartile performers
4.2%
15.9%
53.2%
19.1%
1
“Consistently Better Performer” is developed from the 75% percentile value on each of the financial results drivers and only average on procurement cost
as a % of total spend
2
Additional benefits per full-time equivalents for those participants that submitted some additional benefits
3
Amortized costs not collected in AEP 2014
Source: A.T. Kearney ROSMA Benchmarks from the 2014–2015 reports
As CPOs embrace value-management practices, we expect variance in the performance of
procurement activities to narrow, which will quickly raise the benchmarks. The scenario of
a consistently better performer illustrated in figure 9 will become the new normal for the
top-quartile performance group—a 40 percent improvement in ROSMA.
Sustaining high-performance levels of coverage, velocity, compliance, and functional costs
is largely market independent and achievable. We have seen these measured, and know that
what gets measured gets done. Category yields vary with marketplace dynamics, but additional
benefits from advanced sourcing methods will unleash large gains and, for most, this is new
territory. Therefore, we believe that sustained leadership performance is not only possible but has
yet to be widely realized. Value management-driven procurement in partnership with rigorous
ZBB programs will deliver this new performance threshold (see sidebar: Mobilizing the Profession
on page 16). The issue now is how this enhanced platform for procurement leadership will help
the profession attract tomorrow’s top talent.
Building a Bolder Legacy: The Procurement Mission Is Under Way 15
Mobilizing the Profession
Thomas W. Derry
CEO, Institute for Supply
Management
management issues. Our collaborative research is helping us
explore the opportunities.
David Noble
CEO, Chartered Institute for
Procurement and Supply
ROSMA Performance Check 2015
advanced our benchmarking
insights on value from procurement and the companion Voice of
the CFO and Finance Community
research reaffirmed our opportunity to pursue a bolder mission.
While we still have many procurement teams that are not
progressing and are struggling
to add value, our best continue to
excel and advance even further
showing what can be achieved.
The gap is too visible to ignore and
might explain why we are seeing
increased turnover among CPOs.
Yet, despite this visible gap,
together the profession can
advance in pursuit of a stronger
legacy for the years ahead. If we
collectively adopt and embrace
value management, build a
broader level of awareness of
our strategic value, and invest
in developing and marketing
what procurement is and why it
We are confident that this profession has a bright future. The
growing interest and popularity
of the value-from-procurement
topic continues to shape conversations and forums serving the
profession. This is not a disruptive
force but a welcomed constructive
change agent that challenges us
all to “raise our game,” both in
terms of productivity and results.
In fact, this pressure should not
be a surprise as the resurgence in
M&A, increased market volatility,
continued uncertainty in the
global economy, and industry
disruptors all create significant
cost management challenges and
opportunities. We must respond
to these circumstances while also
sustaining our fiduciary oversight
to supply chain and supplier risk
is important (essentially managing our profession’s and our
own team’s brand message),
we can attract great talent and
deliver better results more
consistently.
CIPS, ISM, and A.T. Kearney
are working with a number of
procurement leaders to build
a stronger legacy for the
profession. We believe that by
encouraging the profession
on these three planks we can
strengthen the position of
procurement as a critical source
of strategic enterprise value,
establish the CPO as a core
executive team member integral
to the leadership narrative, and
position procurement as a
preferred career platform for
tomorrow’s best talent.
We have many opportunities
ahead to ensure we collectively
create a bright future for the
procurement profession.
Transparency and Recognition
The push of CPOs implementing value-management practices or the pull of ZBB will have the
biggest impact on procurement’s ability to attract and retain talent. Generation Y, also known
as millennials, is perhaps the most educated generation in history and the most demanding
as they have entirely different expectations.
Transparency, accountability. Millennials demand transparency. No question about it this is the
“no secrets” generation that wants a view into everything going on around them. Value management or ZBB done well provides this transparency. Millennials also expect accountability, which
means clarity in expectations, visibility into everyone’s results (not just their own), and repercussions for those not carrying their weight. Millennials also want individual dashboards rather than
typical annual reviews. Value management and ZBB are predicated on transparency, and dashboards are integral to these processes working well. Transparency is our bridge to transforming
procurement from a little known, back-office career track to a prestigious career platform.
Cohesive, mission-based teams. Other elements of success must be addressed with this
generation. Millennials like to be part of a cohesive team of mission-based organizations
Building a Bolder Legacy: The Procurement Mission Is Under Way 16
working collectively toward shared aspirations. The old procurement ways of working in
isolated silos supporting narrowly defined tasks, and the implicit profiles of Inconsequentials
and Strugglers, are dead on arrival with this generation. The other profiles may be absent as
well, which points to the need for an identifiable mission.
Procurement already has this mission if willing to embrace it. For example, in managing a
business there are three principle value streams: revenues, people (activities and their costs),
and a unique mix of assets and capabilities deployed to create value, often referred to as
“everything else.” Procurement and supply management is, or should be, responsible for driving
or contributing to everything else—which for most industries comprises a critically important
40 to 70 percent of the business. If procurement leadership takes on its rightful mission—the
full challenge of addressing, influencing, and managing everything else more effectively—then
we can provide the millennials with a bold and purposeful mission.
Gamification: Attracting Generation Y
Tony Milikin
CPO, AB InBev
Talent has been a topic within the
procurement profession for as
long as I can remember, though
mostly a narrative lamenting
frustration rather than celebrating
abundance. I have always
approached talent as if managing
a sports team and constantly
scouting and recruiting new
players. Procurement has a great
story to tell so we can attract
terrific people. And that’s exactly
what we do at AB InBev.
What’s new is recognizing what
we must do to resonate with
millennials. Also known as GenY,
their preferred “specifications”
for the right place to work and the
journey they expect to take with
a company are well defined.
We look for talent at all levels in
all markets, but to highlight GenY
expectations, let me share how
AB InBev attracts talent from the
world’s top business schools
(including Darden, MIT, Harvard,
INSEAD, LBS, Columbia, Wharton,
and Bocconi) to entry point
positions in procurement. It’s not
just the attractiveness of great
beer but more the robust business
concepts and culture.
First, we have a great opportunity
to offer. There are three money
flows to manage in a business—
revenues, people, and everything
else. Procurement is responsible
for everything else and in our
business this has a game-defining
number and scope. These bright
young people can learn the
business from end-to-end, get
executive access and exposure
both internally and with suppliers,
and have a significant impact on
business performance. These
talents manage from the epicenter
of the company. Also, our culture is
performance-driven with targets
and a compensation model that
reinforce meritocracy. We set
stretch—but fair—targets, and
we ensure that all team members
understand their roles in meeting
those targets. We require our
team members to think and
behave like owners, but compete
to become champions.
Millennials thrive on gamification.
Our model and culture does as
well. We give everyone an
opportunity to compete, to hone
their mastery, to put their
achievements on the board, and
to be part of a community built
on the thrill of the game. We have
all the elements of gamification:
rules, goals, structured tracking
and reporting, real world outcomes (results), and a system to
support the visibility and transparency required to foster this
competition. The best athletes
thrive and prosper within a highly
competitive team.
We don’t try to ring-fence our
talent. In fact, we aspire to have
a steady flow of talent through
procurement, because in a few
years’ time procurement alums
are residing throughout the
organization helping us build
stronger ties with the businesses.
Every year, the top procurement
performers are invited to our
procurement university, which
rotates across the top business
schools. It’s an intense week that
is both a reward and a challenge.
The competition to qualify is
intense and the peer recognition
for those who do qualify is priceless. Not every organization is
positioned for gamification, but
for those that are, it works.
Generation Y has made AB InBev
procurement a best athlete
competitor.
Building a Bolder Legacy: The Procurement Mission Is Under Way 17
Clearly defined career path. Millennials thrive in a learning environment where they are
coached and developed, not just managed. They expect a clearly defined career path and to
use their experience and opportunities to shape their careers as they advance along this path.
Providing a distinct career path may be procurement’s biggest challenge as less than half of
CPOs report having talent programs in place and most may lack the coaching skills within their
current management ranks to satisfy millennials’ needs. Yet, this challenge may well be
addressed by assigning new talent to support current best performers working on advanced
sourcing programs. This way, millennials’ strong analytical skills are paired with the best
mentors on the most groundbreaking projects (making this a learning mission).
“Gamification” and winning the trophy. Also important is addressing the trophy kid phenomenon
(see sidebar: Gamification: Attracting Generation Y). Everyone in an organization knows who the
best salesperson is, who has the most patents, who runs the best plant, and who is responsible for
what product. But seldom does this recognition extend to the best procurement talent. Millennials
will not tolerate working in the shadows. Children who were constantly polished, encouraged,
and celebrated are now adults who crave challenges and believe by conquering them they win
advancement, rewards, and recognition. This generation, despite the need for a shared mission,
is energized by “gamification” and a transparent competition and race to win the trophy.
Value-management or ZBB practices (such as transparency, scorecards, and data) and accountability can make our millennials visible and provide for what we in procurement have so far failed
to achieve: enterprise-wide recognition for delivered results. These practices also can address
the bold expectations of the strong, talented people we aspire to attract. To sustain and develop
our profession and our respective organizations, we want this promising, emerging generation
to help us conquer the “everything else” challenge.
Managing the Mission
Procurement faces a transformational period, one that will entail advanced value-management
practices, stronger CPO-CFO partnerships, and a bolder legacy for the procurement profession.
How this happens is in the hands of procurement organizations worldwide. It is procurement’s
time to become visible, measured, monitored, and recognized as a partner that brings real
value to the table.
Authors
John Blascovich, partner, New York
[email protected]
Rosanna Yang, director, Chicago
[email protected]
Joe Raudabaugh, partner, Chicago
[email protected]
A.T. Kearney, CIPS, and ISM would like to thank the executives from AB InBev, Campbell Soup Company, TPG,
and W.W. Grainger for sharing their perspectives on how they are contributing to “Building a Bolder Legacy”
for the procurement profession.
Building a Bolder Legacy: The Procurement Mission Is Under Way 18
Appendix
The appendix includes additional insights from this year’s ROSMA Performance Check regarding
the performance and productivity differences between the bottom, middle, and top performers.
We have also included profile information for the cumulative dataset in the ROSMA database
and from the CFO and finance community survey. Both show the broad mix of geographies,
company sizes, and representatives. Lastly, we appended the four new questions asked in this
year’s CFO and finance community survey.
Figure A
Profile of respondents to the 2015 ROSMA report
70
65%
60
55%
$1–$10 billion
46%
50
40
Less than $1 billion
Greater than $10 billion
34%
28%
30
17%
20
26%
20%
9%
10
0
Bottom quartile
Middle 50
Top quartile
Note: Revenue is displayed in US$.
Source: A.T. Kearney AEP and ROSMA surveys
Figure B
Value driver performance profile varies across benchmark groups
ROSMA driver averages
Bottom
25%
Middle
50%
Top
25%
Overall
Spend influence (%)
70.7%
67.2%
70.0%
68.7%
Velocity (%)
69.4%
66.5%
78.2%
70.2%
Yield (%)
4.7%
6.2%
6.6%
5.9%
Compliance (%)
73.5%
88.2%
89.6%
84.9%
Benefits (savings + additional benefits)
per FTE
$0.28
$0.88
$1.25
$0.83
Procurement value driver
Note: FTE is full-time equivalent.
Source: A.T. Kearney dataset for 2015 ROSMA report
Building a Bolder Legacy: The Procurement Mission Is Under Way 19
Figure C
Spend per FTE in US$ millions
Bottom
quartile
Middle
50%
Top
quartile
Overall
Total spend per FTE
$8.1
$12.4
$22.9
$12.2
Spend influenced per FTE
$5.5
$9.0
$12.7
$8.3
Spend sourced per FTE
$4.1
$5.3
$5.9
$5.1
Note: FTE is full-time equivalent.
Source: A.T. Kearney dataset for 2015 ROSMA report
Figure D
Financial productivity of procurement trend
14
12.7 12.5
11.4
12
10
7.5
8
6
4.5
4
2
0
0.8
0.8
5.1
3.7
5.3
7.6
7.5
5.4
4.1
0.9
Bottom 25%
Middle 50%
Dataset from 2014 ROSMA report
Top 25%
ROSMA averages
Dataset from 2015 ROSMA report
Overall
75% point
Cumulative dataset from 2011–2015
Source: A.T. Kearney AEP and ROSMA survey data, 2011–2015
Building a Bolder Legacy: The Procurement Mission Is Under Way 20
Figure E
Cumulative ROSMA dataset profile (2011–2015)
Region
522
Revenue
522
Greater than
$10 billion (22%)
EMEA (47%)
114
Americas (35%)
522
Manufacturing (23%)
120
Process industries
(34%)
178
Services
(35%)
181
Other (8%)
43
246
$1–$10 billion (46%)
Asia Pacific (18%)
Industries
240
93
183
Less than
$1 billion (29%)
153
Unknown (3%)
15
Source: A.T. Kearney AEP and ROSMA survey data, 2011–2015
Figure F
CFO and finance community survey respondent profile
Cumulative for the two cycles
384 unique individuals
384
ANZ (9%)
36
France (12%)
45
Germany (11%)
43
United Kingdom
(24%)
United States
(43%)
93
167
384
CXOs (23.4%)
90
EVP/EVP/VP
(21.9%)
84
Director/
controller
(77.9%)
384
More than $10 billion
(37.0%)
142
$1 billion to less than
$10 billion (45.6%)
175
$500 million to less
67
than $1 billion (17.4%)
67
210
Source: Research was conducted for A.T. Kearney by Research Now (an independent market research firm) in April 2014 and March 2015.
Building a Bolder Legacy: The Procurement Mission Is Under Way 21
Figure G
This year’s CFO and finance community survey includes four new questions
Question
Answer options
Top-quartile performers provide over $4 in identifiable
financial benefits per $1 of costs or 4X ROI
Q11b
What do you believe is the industry
benchmark for top-quartile procurement
performance or ROI (annual units or $
of hard financial benefits delivered
divided by the total annual costs of
the procurement function)?
Top-quartile performers provide over $6 in
identifiable financial benefits per $1 of costs or 6X ROI
Top-quartile performers provide over $8 in identifiable
financial benefits per $1 of costs or 8X ROI
Less than 4X ROI
Not sure or don't know
Q11c
What do you believe is the industry
benchmark for bottom-quartile
procurement performance or ROI
(annual units or $ of hard financial benefits
delivered divided by the total annual
costs of the procurement function)?
Bottom-quartile performers deliver less than $2 in
identifiable financial benefits per $1 of costs or <2X ROI
Bottom-quartile performers deliver less than $1.5 in
identifiable financial benefits per $1 of costs or <1.5X ROI
Bottom-quartile performers deliver less financial value than
the cost of their activities resulting in an ROI that is less than 1.0
Not sure or don't know
Robust, comparable to the best of other key functions in
terms of breadth, depth, and accuracy; great visibility
Q11d
How would you compare your
understanding and tracking of
procurement performance (team and
individual) relative to other key
operating functions?
We have some visibility into their activities and how they
are doing but it is not at the same depth and does not
command the same level of interest as other functions
Don't know or not sure
Not interested so would not know
Has never happened
Has occurred, but rarely
Q12c
If your organization provides investor
guidance or public reporting, which
statement reflects your perspective
on reporting procurement performance?
If we had a valuable story to tell we would
share something about the success
We have routinely shared insights regarding our
procurement goals, results, and successes
Our procurement lead has routinely briefed our board and
occasionally participated in our analyst calls
We never considered doing this
Note: The 2015 CFO and finance community survey includes 20 total questions. See 2014 ROSMA report titled “Building the Brand of Procurement and
Supply” for the remaining 16 questions.
Source: Research was conducted for A.T. Kearney by Research Now (an independent market research firm) between March 5-12, 2015
Building a Bolder Legacy: The Procurement Mission Is Under Way 22
About A.T. Kearney
A.T. Kearney is a leading global management consulting firm with offices in more than
40 countries. Since 1926, we have been trusted advisors to the world's foremost
organizations. A.T. Kearney is a partner-owned firm, committed to helping clients
achieve immediate impact and growing advantage on their most mission-critical
issues. For more information, visit www.atkearney.com.
About the Chartered Institute of Procurement & Supply
The Chartered Institute of Procurement & Supply (CIPS) is the world’s largest
procurement and supply professional organisation. It is the worldwide centre
of excellence on procurement and supply management issues. For more
information, please visit: www.cips.org.
About the Institute for Supply Management
Institute for Supply Management® (ISM®) serves supply management professionals
in more than 90 countries. Its 48,000 members around the world manage about
$1 trillion in corporate and government supply chain procurement annually. Founded
in 1915 as the first supply management institute in the world, ISM is committed to
advancing the practice of supply management to drive value and competitive
advantage for its members, contributing to a prosperous and sustainable world.
ISM leads the profession through the ISM Report On Business®, its highly regarded
certification programs and the newly launched ISM Mastery Model.™ For more
information, please visit: www.instituteforsupplymanagement.org.
For more information, permission to reprint or translate this work, and all other correspondence,
please email: [email protected].
© 2015, A.T. Kearney, Inc. All rights reserved.