Procurement Budgets, Staffing, and Process Metrics 2024/2025

How much are organizations budgeting for their procurement function, and how many procurement professionals do they require? What is the allocation of procurement resources by job function and types of procurement, and what is the split between internal and external personnel (outsourced or in shared services centers)? How is the procurement budget allocated? What are the key performance metrics for the procurement function? To answer these questions, and others, we provide our Procurement Budgets, Staffing, and Process Metrics study. For a full description, read more below.

PURCHASE/DOWNLOAD: BY INDUSTRY AND ORGANIZATION SIZE

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Chapter 1: Executive Summary (Free Download)
Chapter 2: Composite Metrics
Chapter 3A: Metrics by Organization Size: Small/Midsize
Chapter 3B: Metrics by Organization Size: Large
Chapter 4: Banking and Finance
Chapter 5: Energy and Utilities
Chapter 6: Healthcare Payors
Chapter 7: Healthcare Provider
Chapter 8: Life Sciences
Chapter 9: Discrete Manufacturing
Chapter 10: Process Manufacturing

INTENDED AUDIENCE

For Chief Procurement Officers, procurement professionals, and consulting firms, this study provides key metrics and unbiased data for benchmarking your organization’s procurement function, with a focus on indirect procurement budgets and staffing levels and key performance metrics. This study will allow you to achieve the following outcomes:

• Benchmark your procurement budget levels. Compare them with those of organizations in your industry sector.
• Manage your procurement staffing levels, including internal staffing as well as external staff—those within business process outsourcing (BPO) providers or in shared services units. A variety of staff productivity metrics are provided (see below)
• Evaluate your procurement key performance indicators (KPIs). These allow you to compare the performance of your procurement organization against your industry peers.

For business process outsourcing (BPO) providers, this study provides valuable insights into the current procurement budget and staffing metrics, giving up-to-date insights into the market landscape. It also provides insights into the current use of external procurement personnel for various job positions.

KEY METRICS DESCRIPTIONS

Each chapter begins with an introduction, presenting the key findings.

Demographics

In section 1, we provide a description of the demographics of the survey sample for the chapter. These include organization-size demographics, including organization revenue, SG&A spending levels, number of employees, and revenue per employee.

We continue with procurement demographics, including total procurement staff member head count and total purchase orders per year.

Procurement Staffing Metrics

In section 2, we provide typical staffing levels for the procurement function. This includes internal staff, which includes contingency workers, and external staff, which includes procurement personnel in global capability centers (GCCs) or shared services centers, outsourcing service provider personnel serving the procurement function, or residing in other departments.

• Corporate Employees per Procurement Staff Member
• Corporate Employees per Indirect Procurement Staff Member
• Corporate Employees per Direct Procurement Staff Member
• Internal and External Procurement Staff as a Percentage of Total Procurement Staff
• Percentage of Total Procurement Staff Allocated to Direct and Indirect Procurement
• Direct Procurement Staff Allocated to Internal and External Personnel
• Indirect Procurement Staff Allocated to Internal and External Personnel
• Contingency Workers as a Percentage of Internal Indirect Procurement Staff
• Indirect Procurement Staff by Type of Procurement
• Indirect Procurement Staff by Job Function

Indirect Procurement Function Budget Metrics

In section 3, we look at the annual budget for the indirect procurement function. In other words, we examine how much organizations spend to operate their indirect procurement operations.

• Indirect Procurement Function Budget as a Percentage of Revenue
• Indirect Procurement Function Budget as a Percentage of SG&A
• Indirect Procurement Budget per Purchase Order
• Indirect Procurement Budget by Line Item
• Indirect Procurement Budget per Indirect Procurement FTE
• Internal Procurement Personnel Budget per Internal Procurement FTE
• External Procurement Personnel Budget per External Procurement FTE

Indirect Procurement Spend Metrics

In section 4, we provide benchmarks for indirect procurement spend, that is, how much organizations spend for indirect material and services. In this section, we include all indirect procurement spending, whether it is processed by internal or external procurement personnel.

• Managed Indirect Spend as a Percentage of Total Indirect Spend
• Indirect PO Size
• Indirect Procurement Spend by Type
• Indirect Procurement Spend by Category
• Annual Indirect Spend per Indirect Procurement Staff Member

Procurement Organization Key Performance Metrics

In section 5, we provide benchmarks to evaluate the key performance metrics of the procurement function, with a focus on indirect procurement.

• Purchase Orders per Indirect Procurement Staff Member
• Managed Indirect Spend per Indirect Procurement Staff Member
• Percentage of Indirect POs per year Processed by Internal and External Procurement Personnel
• Days Payable Outstanding (DPO)
• Indirect Spend per Day

Section 6: Procurement Technology Trends

This section provides an overview of procurement technology implemented to support procurement processes of the organization.

• Top 10 Procurement Systems
• Percentage of Procurement Personnel (Direct & Indirect) per Procurement Tech Specialist
• Percentage of Procurement Tech Specialists by Organizational Unit

APPENDIX

The Appendix includes common terms and definitions used in our annual survey and in this study. It also includes a detailed definition for all procurement spending categories and staffing categories. The Appendix concludes with a brief discussion on the statistics used in this study.

• Common Terms and Definitions
• Procurement Budget Categories
• How We Define Procurement Job Functions
• Statistical Notes

CHAPTER DESCRIPTIONS

Chapter 1: Executive Summary (Free Download)

This chapter provides an overview of the key findings from the full study and describes the contents of the subsequent chapters. It also includes information on the study participants and the survey methodology.

• Introduction
• Key Findings
• Overview of the Study Contents

Chapter 2: Composite Metrics

This chapter provides composite metrics for all of the organizations surveyed, across all industry sectors and organization sizes. The 157 organizations in this sample range from $300 million to over $85 billion in annual revenue.

Chapter 3A: Metrics by Organization Size: Small/Midsize

This chapter provides procurement business process metrics for small and midsize organizations across all industries. The 84 organizations in this sample range from $300 million to over $5 billion in annual revenue.

Chapter 3B: Metrics by Organization Size: Large

This chapter provides procurement business process metrics for small and midsize organizations across all industries. The 73 organizations in this sample range from $5 billion to over $85 billion in annual revenue.

Chapter 4: Banking and Finance

Chapter 4 provides benchmarks for banking and financial services companies. The firms in this sector include commercial banks, investment banks, credit unions, mortgage lenders, consumer finance lenders, and other types of lenders and financial services providers. The 27 organizations in this sample range from $300 million to over $25 billion in annual revenue.

Chapter 5: Energy and Utilities

Chapter 5 provides benchmarks for public utilities, oil and gas producers, service companies, and midstream distributors across all organization sizes. The respondents in this sector include public utilities (water, gas, and electric), integrated energy companies, upstream exploration and production companies, natural gas companies, pipeline operators, and other energy and utilities companies. The 25 organizations in this sample range from $500 million to over $30 billion in annual revenue.

Chapter 6: Healthcare Payors

Chapter 6 provides benchmarks for health insurance companies. The firms in this sector include companies that sell medical and dental insurance along with healthcare providers that also offer health insurance plans and function as healthcare payors. The 22 organizations in this sample range from $600 million to over $50 billion in annual revenue.

Chapter 7: Healthcare Providers

Chapter 7 provides benchmarks for healthcare providers, including hospitals, group of hospitals, nursing homes, and other healthcare services providers. The 26 organizations in this sample range from $400 million to over $12 billion in annual revenue.

Chapter 8: Life Sciences

Chapter 8 provides benchmarks for life sciences companies. The 24 organizations in this sample range from $400 million to over $25 billion in annual revenue.

Chapter 9: Discrete Manufacturing

Chapter 9 provides benchmarks for discrete manufacturing organizations. Discrete manufacturers are defined as those where the production process adds value by fabricating or assembling individual (discrete) unit production. The category includes manufacturers of consumer products, athletic equipment, industrial equipment, telecommunications equipment, aerospace products, furniture, auto parts, electrical parts, medical devices, and electronic devices, among other products. The 15 organizations in this sample range from $600 million to over $85 billion in annual revenue.

Chapter 10: Process Manufacturing

Chapter 10 provides benchmarks for process manufacturers. Process manufacturers are defined as those where the production process adds value by mixing, separating, forming, or chemical reaction. The sector includes manufacturers of chemicals, petrochemicals, semiconductors, pharmaceuticals, dietary supplements, food and beverage products, cosmetics, building materials, packaging materials, steel, glass, paper products, and other process-manufactured goods. The 18 organizations in this sample range from $600 million to over $31 billion in annual revenue.

PROCUREMENT BENCHMARKING

Avasant Research not only publishes business process metrics. We also provide custom benchmarking services for clients.

Looking for expert assistance in evaluating your procurement budgets, staffing, and key performance metrics? Our custom benchmarking consulting service provides an in-depth assessment of your procurement key metrics against our database of peer organizations.