7 KPIs your Procurement Team may be ignoring.

Procurement bridges the gap between product, internal stakeholders and customers.

In order to support the weight of internal and external expectations, procurement teams must be prepared to perform as a key value adder within an organization. Meeting expectations at the door isn’t always the easiest task, especially when those expectations can be wide sweeping (example: minimize cost).

A procurement strategy should be structured with a clearly defined set of goals and an overarching vision. Having clear goals in mind will allow your procurement team to backtrack, and think; ‘what do we need to do now, to reach our goals later.’ Success is a product of the work done in the present.

Managing the performance of your procurement activities is a good way to work towards goals in a methodical and strategic fashion.

**Disclaimer: I’m about to make all CEOs out there very happy with the following statement.

Reaching goals is best done when there is a clear indication, and management, of key performance parameters. This process is called Key Performance Indicator mapping, also known as developing KPIs. “KPIs should be SMART which means Specific, Measurable, Achievable, Relevant and Timely” (CIPS).

You may already be actively gauging KPIs within your procurement operations, but it’s important to continuously evaluate and reevaluate the essentials. Just because you’ve filled your wardrobe with the essential clothing items, doesn’t mean you’re not going to have to replace certain pieces when they get old, or update your fashion sense, or have accent pieces that are unique to your style.

Developing KPIs is crucial, and individual, to the infrastructure of your procurement team. KPIs can be the blueprint for success, and also the floor plan for pivoting. Remember, goals drive performance, and knowing how to gauge that performance is the only way to reach your goals. But, sometimes goals are unrealistic or misguiding. Gauging performance is equally as important to forging forward, as it is to thinking things over.

Whatever way you cut it, developing KPIs is all about identifying value drivers, and exploiting those areas for organizational gain. Procurement is a means to an end, and the end is enhanced top-line value.

For years, procurement KPIs have been pigeonholed to cost, time of delivery and spend. While these remain important elements of procurement performance, the growing complexity of global procurement forces us to revisit performance indicators. Fortunately, technology is beginning to play a role in the success of value-added through procurement. Be it qualitative or quantitative, structuring KPIs will allow you and your procurement team to gather business-critical data sets; individual to your organizational needs. This information will serve as the basis for more data driven decision-making.

Misguided performance isn’t helpful, it’s just resources spent. In the words of legendary basketball coach John Wooden, “Don’t mistake activity with achievement.”

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