How to Start a Non-Financial Measurement Strategy?
For today’s buyers, measuring the overall non-financial success is essential. It is unsustainable to only monitor the cash gains, and it fails to provide a clear picture of the value that procurement teams add to an organization to look at some clear information.
Here the points are how the organization can put the non-financial approach into action.
- KPI Selection: Need to decide which KPIs will be used to gauge the performance of the organization’s goals and which ones wish to monitor clearly.
- Strategic Goals and Objectives: Identify the main strategic goals and objectives of the company.
- Benchmark Data Collection: Collect the required benchmark data so anyone can assess the overall progress.
- Identification of Important Projects: To help the company achieve its strategic objectives, identify important projects as needed.
- Project Progress Tracking: Track the progress of the projects.
- Timely Communication to Relevant Parties: Inform the relevant parties timely.
What are Non-financial Performance Metrics for Procurement?
Most organizations set savings as their main procurement objective, but after a team reaches a particular maturity level of the process, it’s critical to include critical metrics for monitoring non-financial objectives. Procurement must be in line with the company’s strategy and goal, and it most certainly has the potential to directly influence some strategic objectives of its growth. At that point, procurement teams must start optimizing beyond cost reductions and quantifying contributions as per requirement in ways other than monetary ones. Today’s teams have shifted their focus to include assessing non-financial performance as a component of their overall strategy to grow the business process.
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