Financial vs. Operational Procurement KPI's

I hope that you have enjoyed the article "10 Procurement KPI's, Part II."

While Part I featured financial KPI's used by senior management to assess and benchmark the relative contribution of their procurement teams, Part II is more focused on measuring the success of the day-to-day operations of the procurement group. Both types of measurements are necessary, but they are applied differently.

The financial KPI's are measured less frequently. They are more concerned with a high-level view of Procurement's contribution. They are used for leadership of the procurement function.

The operational KPI's are measured constantly. They deal more with managing the day-to-day procurement process.

While "management" tends to have almost a negative connotation when juxtaposed with "leadership," as discussed in the "Are You CPO Material?" podcast, both management and leadership are necessary for success. In the case of these procurement KPI's, it is unlikely that the financial KPI's will show top-notch performance unless solid management is in place to deliver good operational KPI's.

Let me close with a reminder that the big announcement that will rock the purchasing certification world will be issued on Wednesday July 1, 2009 right here on this blog. By the way, July 1, 2009 is the fifth anniversary of the SPSM^® Certification.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
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