World-class procurement executives spend 27 percent more than their peers on technology, despite the fact that they spend dramatically less on procurement operations overall, according to the latest Book of Numbers research into procurement practices and performance metrics from The Hackett Group, a business process advisory firm and an Answerthink company.
According to Hackett's research, increased spending and improved leverage of existing technology investments are key strategies that enable world-class procurement executives to shift spending away from transactional activities and towards work that provides higher strategic value and improves effectiveness. For example, world-class procurement executives allocate 36 percent more of their overall procurement resources to decision support and risk management than typical companies. Technology also enables world-class procurement executives to improve efficiency, helping them reduce their cost per purchase order to $8.54, while typical companies spend 134 percent more. In addition, world-class procurement executives operate with 38 percent fewer staff than typical companies, show significantly improved cycle times and reduced error rates.
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