Procurement Operating Expense as a Percentage of Managed Spend

Procurement Operating Expense as a Percentage of Managed Spend

KPI Details

Procurement Operating Expense as a Percentage of Managed Spend measures the total operating-relating expense incurred by the Procurement Department in relation to the dollar amount the Procurement Department has spent on purchases over the same period of time, as a percentage. A lower than average value for this metric is typically related to a few common factors, including non-compliance to company policies and procedures concerning purchases, general inefficiencies within Procurement Department processes (e.g., miscommunications concerning procurement forecasts, misunderstandings over what products/services are needed, inefficient cost comparison research, etc.) and sub-par procurement employee training and performance.

KPI Definition

The total operating-related expense (employee salaries and benefits, occupancy costs, etc.) incurred by the Procurement Department divided by the dollar amount the Procurement Department has spent on purchases over the same period of time, as a percentage.

KPI Calculation Instructions Procurement Operating Expense as a Percentage of Managed Spend?

KPI Formula :