Major companies have recognized the importance of investing in procurement performance management. In recent years, procurement’s role transformed from solely cost focused to one that is more vital. Procurement Performance Managers (PPMs) ensure that procurement performance is monitored, optimized and impactful. 

PPMs are uniquely qualified to develop and drive successful strategies that move enterprise-wide initiatives forward. Their responsibilities are directly tied to process improvement including savings tracking, reporting and value capture. PPMs must effectively communicate with the CPO, procurement organization, and finance team. Additionally, PPMs help their teams function effectively and efficiently, comply with ESG standards, mitigate risk and support the achievement of corporate objectives.

The Dynamic Duo: Technology and Strong Procurement Leadership 

“In 2023, the role of the Procurement Performance Manager (PPM) is becoming critical as businesses seek to effectively navigate the challenges associated with a threatening economic and supply chain landscape,” said Antoine Philip, head of procurement performance at Kingfisher. “The PPM’s role and responsibilities are directly linked to process improvement regarding savings track, reporting and value capture. A major part of this job is to provide the right tools to monitor procurement performance and communicate effectively to the CPO, to the whole procurement organizations and also finance.”

Having access to technology that can provide visibility and insights for decision-making is incredibly important for PPMs. Simultaneously, they should have a deep understanding of their teams’ pain points as well as those of company leaders and stakeholders. Therefore, PPMs know they need to invest in new and emerging technologies in order to find success.

Today, procurement performance managers are using spend intelligence tools to gain a comprehensive understanding of how companies spend money, allowing them to identify areas for cost savings and develop strategies to reduce waste while also improving spending efficiency.

Many procurement teams neglect or underestimate the value of spend analysis. In fact, Ardent Partner’s recent report states, “CPOs running their procurement operations without visibility into their spend are committing procurement malpractice.”

Procurement performance management (PPM) solutions allow individuals to stay on top of active projects by identifying potential risks and challenges while allocating resources effectively. A PPM solution enables the tracking, measuring and analysis of procurement activities, providing a centralized platform to store and share savings reports for completed projects. This platform assists with easy communication and provides reliable figures to audit against KPIs.

If a company has a new ESG (environmental, social and governance) target, it can use technology to flag projects with those goals in order to proactively monitor their progress. This allows PPMs to really shine since companies have to be more transparent about their carbon footprints, sustainable practices and other ESG-related metrics. Procurement performance managers can work alongside stakeholders and executive teams to ensure all parties are on the same page.

Combining spend intelligence with procurement performance management solutions creates a closed-loop system. With a complete view of procurement activities, including spending data, project progress and performance metrics, procurement leaders are able to align their strategies with actual execution. 

Stakeholder Misalignment: Where PPMs Bridge the Gap

Procurement performance managers can bridge communication gaps, too. PPMs can ensure teams have a clear understanding of the needs and expectations of stakeholders. From there, they can leverage spend intelligence to have data-driven planning discussions during the project kickoff stage. This way, as the project tracks, it is transparent to all and easier to enable collaboration. 

Finally, procurement performance managers utilize certain solutions to provide a centralized location for all stakeholders to access and review information including contracts, agreements and more strategic, non-financial performance metrics. By bridging the gap between procurement management and sourcing execution, PPMs eliminate stakeholder misalignment and ultimately improve company and consumer satisfaction.

Pierre Laprée is chief product officer at SpendHQ.