The A.T. Kearney 2016 Return on Supply Management Assets (ROSMA) Study sheds light on valued-driven procurement and the need for more consistency and transparency in procurement performance. The report dives into return on supply management assets, which among other areas also looks at the kind of ROI different segments of industries are achieving from their investments within procurement.
The ROSMA study is a continuous exercise with information added every year. The report identifies major differences between leaders and laggards based on the return procurement organizations achieve on investments in purchasing staff and technology.
Top-quartile performers are the group that delivers more than seven times their cost and investment in procurement. Firms in this category have a low functional cost-to-serve and report the highest levels of value creation from advanced sourcing methods.
Middle-tier performers are the group that generates value three to five times their cost and investment base.
Bottom-quartile performers are the laggard firms that demonstrate improvement over past periods, but whose average procurement function barely delivers enough value to cover the investments in staff and technology.
The report indicates that companies who can make the leap from one quartile to the next can generate substantial financial value; it estimates that an enterprise that can jump from the bottom quartile to average can increase its overall earnings by 15%, while mid-tier performing companies that can leap to top-quartile can gain 21% of earnings improvement.
Key highlights from AT Kearney’s ROSMA study include:
- 2016 research insights – presenting current and cumulative benchmarks from the ROSMA report and insights from the companion research, Voice of the Stakeholders
- So, This Is What Good Looks Like – profiles the top procurement performers, their attributes, achievements, and leadership
- Technology: Prepare for Impact – sheds light on how emerging technologies and strategic moves to reset capabilities will redefine procurement
- “Houston, We Have a Problem” – offers a cure for procurement’s branding problem, specifically the inability to attract and retain top talent
- Disruptive Procurement – outlines the beginning of a new and exciting chapter that takes procurement beyond its borders and energizes the entire industry.