Procurement Champions – Benchmark Study 2014

5 key learnings

Chief Procurement Officers are asked to deliver more and more. They don’t always have the resources to match expectations. What do CPOs need to deliver results and become procurement champions?

1. Procurement team size is determined by value of annual program

Procurement team size is strongly linked to the total value of the annual procurement program. The only statistically significant correlation for factors determining the size of a procurement team was that between team size and the value of the annual procurement program.

2. Laggards and Followers have a lot to catch up

Total value of contracts that each procurement team member establishes per year were examined. The top third of organisations for this metric were termed, ‘Efficiency Champions’. The second third ‘Followers’ and the bottom third ‘Laggards’.

Efficiency Champions establish $340m worth of contracts per year – a whopping $34.7m per employee! Laggards put together contracts worth $21.5m – only $1.6m per employee.

3. Champions run 20 – 30 complex projects each with a value of $18m

In comparison, Laggards complete less than 10 projects, each with a much lower value of $4.5m. Interestingly, both take 6 to 9 months to complete such a project.

4. CPOs rate team capabilities at 53% or lower

This suggests all procurement teams have room to improve their overall capabilities, especially regarding procurement systems and procurement experience of staff outside the procurement team.

Champions and Followers rate the maturity of their procurement systems 35% higher than Laggards.

All three groups struggle with the procurement experience of their clients in the business units. They rate this maturity factor at only 37%.

5. Public sector procurement functions are 2x as big

34 people are part of a typical procurement function in Public sector organisations. In the Private sector, this number is 17 for companies in Industry and just 9 in Service firms.

eBook Hitting the Reset Button

Hitting the Reset Button
Setting up Australian Procurement Teams for the post pandemic world: What does ‘good’ look like?

Do you know if your procurement team is set up right?

Grosvenor has undertaken annual research into the state of the Australian procurement profession over the past ten years. This year we focused on what the typical Procurement Team setup is and how this contrasts to better practice.

What's inside?

  • Top priorities of procurement teams right now
  • Expected top challenges for the next 12months The most common procurement centralisation model Benchmarks of procurement teams including spend and staffing The most common length of time for a procurement
  • Detailed benchmarks for various procurement team sizes