Pierre Mitchell's blog

Are Your Procurement KPIs Balanced or Obsolete? - Part 2

KPIs for CPOs, Procurement benchmarking

In Part 1 of this series on procurement’s key performance indicators (KPIs), we discussed how legacy KPIs need to be augmented to help procurement expand its value proposition. In this second installment of the series, we’ll focus on how to build a balanced “360-degree” procurement scorecard and highlight some truly KEY performance indicators that help foster the right behaviors and alignment across the source-to-pay (S2P) process and the broader value chain.

This two-part brief is available to readers as part of SIG and Spend Matters ongoing partnership.

Click here to read part one.


KPIs: Become What You Measure

Everyone knows the old adage, “What you measure is what you get.” Known as the “Hawthorne Effect,” it has been shown that performance will improve when those performing the process know they’re getting measured on it. So, designing stakeholder-specific KPIs is critical to ensuring business alignment. The “SMART” (specific, measurable, achievable, relevant and timely) metrics model is an excellent framework to apply here. Still, the first step is ensuring a 360-degree measurement system that aligns procurement with:

Pierre Mitchell, Spend Matters’ Chief Research Officer

SIG Speaks to Pierre Mitchell, Chief Research Officer, Spend Matters

Pierre Mitchell will present at the SIG Procurement Technology Summit

What is your role and what are your day-to-day responsibilities?

I wear a lot of hats! I advise practitioner advisory clients on their digital procurement (and broader transformation) initiatives. I particularly like working with Center of Excellence leads! We also serve technology providers and consultants, and I help out with thought leadership (e.g., webinars) and strategy. I lead a team of analysts, but also personally help cover the Contract Lifecycle Management (CLM) space and broader areas in supply chain, risk management, etc.

We’re evangelizing a concept called “Commercial Value Management” that is basically “CLM on steroids.” Finally, I’m responsible for our “Solution Map” provider intelligence benchmark and other market intelligence and product development efforts, and have been spending a lot of time videoconferencing like everyone else!

What is something that you wish more people knew about sourcing and procurement?

It’s so, so much more than cost cutting and doing deals, but rather, about intelligently externalizing the business to safely tap the power of (increasingly digital) supply markets to maximize enterprise value.  Yeah, there’s a lot of words in that statement, but it’s true! It’s the ultimate cross-functional and cross-discipline function. 

In your opinion, what are 3 skills that sourcing and procurement professionals of tomorrow must have?

The skills that are still required today: business domain knowledge, stakeholder/relationship management, supply management (strategic cost management, negotiations, SRM, SCM, risk management, etc.), market intelligence and change management.

Pierre Mitchell, Chief Research Officer, Spend Matters

Procurement KPIs that every CPO, Supply Manager and Buyer Needs to know

KPIs for CPOs

In this introduction to KPIs and related considerations, we’ll examine not only which KPIs matter, but also how to use them and expand them to support procurement’s broadening role — and also how certain KPI approaches can mislead.

This two-part brief is available to readers as part of SIG and Spend Matters' ongoing partnership


Procurement leaders know that managing spend (what you pay) and supply (what you get) is much more than tactical efficiency improvements and short-lived price reduction efforts. Enabling this procurement evolution requires a balanced scorecard to measure procurement contribution and key performance indicators (KPIs) that quantify the return on investment (ROI) of current procurement processes and also new and improved processes that are increasingly powered by emerging digital capabilities.

In this introduction to KPIs and related considerations, we’ll examine not only which KPIs matter but also how to use and expand them to support procurement’s broadening role — and also how certain KPI approaches can mislead.

What’s the problem with KPIs?

When measuring procurement’s value contribution to the business, the first questions to raise are these: (i) What KPIs should I use (ii) and why?

Although year-on-year purchased cost reduction has been a key historical value proposition of procurement, companies can't "save their way to zero." As businesses are evolving and digitally transforming, procurement organizations must also transform their KPIs to not just measure legacy procurement processes (or procurement services), but to also guide the transformation efforts themselves and build better procurement scorecards that reflect how procurement can enable broader business objectives.

Pierre Mitchell, Spend Matters’ Chief Research Officer