Buyers: Case 2. Comparing Procurement Activity Results with Similar Buyers Across Different Regions and Industries
Before proceeding with the actual implementation of the task, we need to clarify the terms of the assignment.
The primary question is how does my organization’s procurement activity compare to similar organizations? Benchmarking principles will underlie this idea, wherein it’s prudent to compare process efficiency to identify your organization’s strengths and weaknesses.
Firstly, we need to define what we consider “similar organizations.” These can be grouped by:
- Geographic Location: All organizations within your area of interest. The “Customer Geography” field within the main filters list enables geographic filtering. After selecting a region, you can narrow down to districts within the region using subsequent filtering.
- Functional Characteristics: Organizations performing similar functions. The “Search in List” field within the “Buyers” filter allows you to search by partial name, capturing organizations like schools, hospitals, government offices, etc.
- Reporting Hierarchy: Organizations within a particular reporting structure. The main filters list includes the option “Budget Program Administrator,” responsible for planning, justifying, and implementing budget programs. The selected value will provide data for all organizations overseen by the selected administrator.
To start, assemble data regarding your own organization’s activities or those of the comparison group. Select your organization’s name from the “Buyer Profile” list, either by entering the name or BIN number (business identification number).
Take note of the aggregate values of the selected organization. Given that the selection is retained when navigating between sheets, you can explore the indicators that are important to you.
For comparison, you can choose buyers from the comparison group to evaluate key metrics.
The results can be compared in various dimensions. In this particular case, we’ll focus on three:
- Sole-source Procurement: The sheets labeled “Non-competitive Procurement” and “Contracts” are of interest here. Take note of the chart titled “Top 20 Buyers Ranking” within the “Contracts” sheet for a comparative analysis of procurement volume based on the total contract value, categorized by competitive sourcing. A similar function is available through the “Ranking” chart under the “Non-competitive Procurement” sheet. The data on this sheet is limited to competitive procurements, but you have the flexibility to move beyond the top 20 buyers and toggle between different dimensions and measures.
- Budget Utilization: The sheets “General Overview” and “Planned Items Table” are relevant. Pay attention to the ratio between “Planned Amount Excluding VAT (Value-Added Tax)” and “Final Amount of Contract Items, Excluding VAT.” The “Planned Items Table” sheet will show a specific list of items with the option to filter by status, allowing you to focus on unfulfilled plans.
The obtained data will help evaluate the effectiveness of procurement activities in your selected region and industry sectors and compare it with similar buyers in other regions and industries. Based on the analysis, decisions can be made concerning necessary adjustments in procurement operations.