Benchmarking can provide valuable evidence about your performance and the value you deliver to your organisation. It also provides an opportunity to learn from others and can reassure the business that you are in-step with the latest thinking. You may wish to explore how you compare in terms of capabilities, processes, or performance. You can learn from best-in-class organisations, identify what they’re doing well and understand how you compare. You’re then able to set targets for your own organisation's improvement, but you can also learn from their experience and avoid pitfalls that they have may have encountered along the way.
Benchmarking can involve digesting and making sense of a lot of data, and be quite an investment, so planning is important. You might want to consider the following steps before jumping right in.
- Set clear objectives – identify specific areas that you would like to improve or better understand. This could be specific processes and governance, the size of your team and how much you are paying them, how well skilled your teams are; or more specific information regarding categories of spend eg energy, or your approach to a risk or sustainability issue. Having well defined goals will help you to find the right data for you.
- Select relevant sources – To gain accurate and actionable insights, choose benchmarking sources that are relevant to your function, sector, company size, geographic location etc. Learning from others can be a valuable source, so peer to peer groups, conferences and professional networks can be a great source of information. You may need a deeper dive or further validation for some areas where you could turn to external sources such as market research, or organisations such as CIPS to gather more comprehensive data.
- Gather data and analyse – Once you have ensured that the data is accurate, complete and consistent you can compare it with your performance and start to identify some gaps. An analysis of your strengths, weaknesses, opportunities and threats (SWOT) will help tease these out, followed by a root cause analysis to understand the factors that contribute to the variations in performance.
- Learn and tailor – There is nothing wrong with stealing ideas from others, but ensure that you have adapted them to suit your organisation. Be open to innovation and explore emerging trends that can enhance your procurement function.
- Develop an action plan - Once you have prioritised areas that you would like to improve, develop a clear action plan with measurable goals. Set KPIs and assign resources to break it down into manageable steps. Communicate your ambitions and progress with wider stakeholders to garner their feedback and buy in.
- Continuous improvement – Benchmarking is an on-going process so continue to seek opportunities to improve and stay updated with trend and best practices. A commitment to your own professional development is a great way of understanding what is new, what leading edge companies are doing or what risks and legislation may impact you.
Benchmarking is an investment in time and resources so ensure you are clear on what it is you are trying to achieve. Ensure that any data or help you seek is from a relevant and trusted source. This can help with building business cases for investment in your teams, or technology for instance. It can help validate the value you deliver to the business and increase your internal credibility.
Resources
CIPS has some free resources to help you on your journey including a Procurement Excellence Health Check to review your policies and processes: https://www.cips.org/employers/services/procurement-excellence-programme
a Skills Gap Analysis for you and your team https://www.cips.org/employers/people/skills-assessment
and our independent CIPS Salary guide to ensure you are focusing on the right skills development and remuneration packages to attract and retain the best talent.
Get in touch today: Corporate.solutions@cips.org