How to measure procurement KPIs?
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All KPIs have different calculation methods, so you need to shortlist the KPIs that correspond with the processes you want to track first. For procurement management, these often include Compliance rate, Rate of Emergency Purchases, Spend Under Management, Procurement ROI, etc.
Once you have the KPIs you require, you’ll have to search for or develop ways to calculate them. For example, if you want to look at your Compliance Rate, you’ll simply have to take the ratio of disputed invoices to paid invoices.
KPI calculation will yield incorrect results if your records are not incomplete or hard to access. This is often the case in manual procurement processes. You can ensure perfect tracking and KPI calculation through the use of procurement automation software. It will let you choose the metrics you want to track and generate customized reports likewise. As it will record all relevant data by itself, manual entries and errors will be eliminated, and you’ll get precise results.
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