Pulse of Procurement 2014: An Analysis of Procurement Benchmarks (Part II) for 2014
In post 1 on Pulse of Procurement 2014 series we discussed the Pain Areas for 2014 and the future expectations of Procurement Execs followed by a discussion of the current state of Procurement in post 2. In our latest post we continue to explore the Procurement Benchmarks of 2014 and would highlight the impact of procurement technology on attributes like contract compliance, sourcing cycle time and order cycle time.
The percentage of Contract Compliance has risen 14 points in the last 3 years, from a weighted average of 41% in 2011 to 55% in 2014. Despite the above mentioned increase in compliance, Contract Compliance continues to be one of the top three pain areas concerning the Procurement Executives in 2014. Some noteworthy observations include the fact that low compliance companies are 4 times more likely to be using ‘mostly homegrown’ solutions viz-a-viz high compliance companies. Furthermore, high compliance companies report more than 2 times higher adoption and use of procurement technology viz-a-viz low compliance companies.
It has also been observed in the study that companies using e-Sourcing and/or Contract Management solutions display shorter sourcing cycle times. It is noted that sourcing cycle time for these companies are around 2 weeks shorter for simpler categories and around 1 week shorter for complex & service categories.
Moreover, companies using Procure-to-Pay (P2P) solutions display shorter order cycle times; the reduction in order cycle time for simpler categories is around half the time taken by companies that do not use Procure-to-Pay (P2P) solution. For service and complex categories, the order cycle time is 2–3 days lower for companies using Procure-to-Pay (P2P) solution viz-a-viz companies that do not use the same.
In our next blog, we will discuss the various Procurement Technology Trends for 2014. So stay tuned for more insights…
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