Study reveals procurement ROI

A study has revealed that top procurement teams are delivering over seven times return on investment.

The study entitled Building the Brand of Procurement and Supply was conducted by the Chartered Institute of Purchasing and Supply (CIPS), the Institute for Supply Management (ISM) and global management consultancy firm A.T. Kearney. It draws together data from the Return On Supply Management Assets (ROSMA) performance check, which has so far benchmarked hundreds of companies and the financial performance of their procurement and supply teams.

It found that the top 25% of procurement teams are generating a staggering $1.6m (£990,000) in financial benefits per employee per year, equating to more than seven times their average costs and investment in assets.

The middle 50% of teams also delivered a strong return of between four and five times on asset investment. However, the study found their productivity has not improved since ROSMA began collecting data in 2011.

Some teams struggling

However, the findings were less positive for some procurement teams at the other end of the scale. The bottom 25% of teams were reported as being "dilutive, with financial benefits that do not cover the cost of and investment in their organisations". Meanwhile, across all respondents it was found that "substantial productivity improvement opportunities are being missed".

Boosting procurement performance

Finding a talented and experienced procurement manager could help drive your team forward to deliver better financial results and productivity. That's why at Portfolio Procurement we work with candidates to ascertain the true value they can add to an organisation. Instead of the usual list of day-to-day job activities, we compile examples of their outstanding successes, challenges overcome and projects undertaken, and seek to explore how these are relevant to your business.

Call us on 020 7650 3191 if you are interested in our bespoke recruitment services, or browse the procurement jobs we have available if you are a professional looking for the next step in your career.