Zycus recently released the findings from the P2P benchmark study with responses from over 450 global procurement organizations. The study focused on painting a complete and realistic global landscape of where procurement organizations stand on a broad array of indirect spending and procure-to-pay (P2P) process performance metrics. In this blog, I would be highlighting the current state of procurement organization for 2 key performance indicators for indirect spending viz. Visibility & Compliance.
Visibility- Many companies still appear to be struggling with the transition from better transaction documentation to consistently generating actionable analytics for procurement. The study finds, for example, that only 45% of total indirect spend, on average, is currently being classified to a sufficient level of detail to enable spend analytics that procurement professionals would classify as ‘actionable’. Without continuous improvement in the accuracy and granularity of spend intelligence, organizations will be finding it increasingly difficult to achieve market and strategic sourcing wins over time.
Compliance– With our earlier Pulse of Procurement 2014 report pointing compliance to P2P processes as the top 3 pain points for procurement teams worldwide, it wasn’t surprising to see close to 50% of procurement organizations having only 40% of their indirect spend flowing through compliant P2P processes. Also, the weighted global average for indirect spend under preferred contract stands currently a 40% with just over half (55%) of procurement professionals estimating they have something less than 40% of addressable indirect spending under contract with preferred suppliers and only 21% reporting greater than 61% under preferred contract at this time.
Part 1 of the benchmark study provides you with more in depth analysis into how procurement teams worldwide stand in relation to influencing and controlling indirect spending and also looks at the P2P technology landscape.
Click on the download button below to access your complimentary copy for further insights into key performance indicators for indirect spending.