SAP Ariba Benchmarking Report
Procurement Benchmark Survey InsightsKey metrics and bestpractices to improvesource-to-pay performance Download the DocumentProcurement
Benchmark
Survey Insights
Key metrics and best
practices to improve
source-to-pay performance
Benchmark
Survey Insights
Key metrics and best
practices to improve
source-to-pay performance
1. Benchmark data is obtained on a rolling basis through surveys available in the SAP Ariba Benchmark Program.
2. Quartiles are grouped as follows: Top 25% of participants, average 50% of participants, and bottom 25% of participants.
As the old saying goes: “Don’t look back—something
might be gaining on you.” The truth is, plenty of
companies could be threatening your market
position, but without accurate data to tell you the
real story, you might not know until it’s too late.
So what’s the best way to evaluate where you stand,
and what steps you should take to get ahead?
Benchmarking. And while tracking progress against
your own internal goals is important, knowing how
you’re performing compared to competitors is even
more crucial in today’s volatile economy.
SAP makes this easier by regularly gathering and
analyzing extensive benchmark data from hundreds
of leading companies worldwide, then providing
access to the information in a series of reports.1
Whether you need to build a business case
to support investment in procurement digital
transformation, assess outcomes from your
source-to-pay solutions compared to other
companies, or identify KPIs to improve your
source-to-pay function, the facts presented in
these pages can help.
Based on benchmark surveys conducted over the
past two years, our report covers the key metrics
in procurement processes across the source-to-
pay cycle. Results are presented as top, average,
and bottom quartiles to indicate the degree of
participant success.2 We also list best practices
that elevate companies from an average level of
performance or savings to best in class, offering
insight into effective strategies you can use in
your organization.
Benchmark your way
to better business success
2 | 16
2. Quartiles are grouped as follows: Top 25% of participants, average 50% of participants, and bottom 25% of participants.
As the old saying goes: “Don’t look back—something
might be gaining on you.” The truth is, plenty of
companies could be threatening your market
position, but without accurate data to tell you the
real story, you might not know until it’s too late.
So what’s the best way to evaluate where you stand,
and what steps you should take to get ahead?
Benchmarking. And while tracking progress against
your own internal goals is important, knowing how
you’re performing compared to competitors is even
more crucial in today’s volatile economy.
SAP makes this easier by regularly gathering and
analyzing extensive benchmark data from hundreds
of leading companies worldwide, then providing
access to the information in a series of reports.1
Whether you need to build a business case
to support investment in procurement digital
transformation, assess outcomes from your
source-to-pay solutions compared to other
companies, or identify KPIs to improve your
source-to-pay function, the facts presented in
these pages can help.
Based on benchmark surveys conducted over the
past two years, our report covers the key metrics
in procurement processes across the source-to-
pay cycle. Results are presented as top, average,
and bottom quartiles to indicate the degree of
participant success.2 We also list best practices
that elevate companies from an average level of
performance or savings to best in class, offering
insight into effective strategies you can use in
your organization.
Benchmark your way
to better business success
2 | 16
The SAP advantage
No matter where you are on your spend
management journey, SAP procurement
solutions enable you to transform results
across source-to-pay processes, including
selecting goods and services, enforcing
compliance, receiving and reconciling
orders, and managing invoicing and payment.
Through SAP Business Network, you can
drive closer, more productive collaboration
with suppliers while maximizing supply
chain visibility. And if you’re trying to create
a business case to support investment in
new solutions, please reach out to us—we
can assist you by sharing extensive data and
experience that make it easier to manage the
complexity and challenges involved.
Building a digital advantage
This year’s analysis highlights several trends that have
repeated across multiple survey periods:
• Companies continue to prioritize sourcing savings
and cost reduction.
• Digital transformation is driving an energized focus
on operational efficiency.
• To increase adoption of digital solutions,
companies are seeking out tactics and strategies
that make life easier for their end users.
Moreover, digital technologies are playing an
increasingly central role in optimizing source-to-
pay outcomes. The data shows that the top tier
of companies using SAP Ariba solutions realized
exemplary results, despite facing ongoing supply
chain challenges. Compared to peers, these
organizations were able to deliver better cost
controls and manage more spend with lower
headcount, freeing them to perform more strategic
tasks for the business.
3 | 16
No matter where you are on your spend
management journey, SAP procurement
solutions enable you to transform results
across source-to-pay processes, including
selecting goods and services, enforcing
compliance, receiving and reconciling
orders, and managing invoicing and payment.
Through SAP Business Network, you can
drive closer, more productive collaboration
with suppliers while maximizing supply
chain visibility. And if you’re trying to create
a business case to support investment in
new solutions, please reach out to us—we
can assist you by sharing extensive data and
experience that make it easier to manage the
complexity and challenges involved.
Building a digital advantage
This year’s analysis highlights several trends that have
repeated across multiple survey periods:
• Companies continue to prioritize sourcing savings
and cost reduction.
• Digital transformation is driving an energized focus
on operational efficiency.
• To increase adoption of digital solutions,
companies are seeking out tactics and strategies
that make life easier for their end users.
Moreover, digital technologies are playing an
increasingly central role in optimizing source-to-
pay outcomes. The data shows that the top tier
of companies using SAP Ariba solutions realized
exemplary results, despite facing ongoing supply
chain challenges. Compared to peers, these
organizations were able to deliver better cost
controls and manage more spend with lower
headcount, freeing them to perform more strategic
tasks for the business.
3 | 16
ANNUAL SOURCING SAVINGS
Best practices to boost sourcing savings:
• Increase the use of auctions in your sourcing activities to
drive down costs and reduce sourcing cycle times. The
use of auctions will also improve supplier relationships by
giving them answers faster.
• Properly educate and communicate with suppliers before
sourcing events, rather than just sending event notifications
without any guidance on how and why suppliers
should participate.
• Create a tactical sourcing strategy to capture and manage
one-off buys where spend is not formally sourced.
• Focus on large global categories of spend while also
driving local competitiveness.
Note: Sourcing savings are calculated by taking the difference between historical spend and awarded spend and dividing by historical spend.
In some cases, we estimate savings using common industry methodology (where events are not awarded).
Total strategic
sourcing savings rate
as a percentage of
addressable spend:
Top-quartile organizations
ACHIEVE OVER 9%
annual sourcing savings by running
more competitive sourcing events
Sourcing
savings rate
from an
awarded
auction event:
Top:
9.3%
Top:
11.3%
Average:
7.2%
Average:
7.4%
Bottom:
3.4% Bottom:
3.0%
Explore how
DIGITAL SOURCING SOLUTIONS
can help you realize similar cost
savings.
4 | 16
Best practices to boost sourcing savings:
• Increase the use of auctions in your sourcing activities to
drive down costs and reduce sourcing cycle times. The
use of auctions will also improve supplier relationships by
giving them answers faster.
• Properly educate and communicate with suppliers before
sourcing events, rather than just sending event notifications
without any guidance on how and why suppliers
should participate.
• Create a tactical sourcing strategy to capture and manage
one-off buys where spend is not formally sourced.
• Focus on large global categories of spend while also
driving local competitiveness.
Note: Sourcing savings are calculated by taking the difference between historical spend and awarded spend and dividing by historical spend.
In some cases, we estimate savings using common industry methodology (where events are not awarded).
Total strategic
sourcing savings rate
as a percentage of
addressable spend:
Top-quartile organizations
ACHIEVE OVER 9%
annual sourcing savings by running
more competitive sourcing events
Sourcing
savings rate
from an
awarded
auction event:
Top:
9.3%
Top:
11.3%
Average:
7.2%
Average:
7.4%
Bottom:
3.4% Bottom:
3.0%
Explore how
DIGITAL SOURCING SOLUTIONS
can help you realize similar cost
savings.
4 | 16
Best practices to increase
sourcing efficiency:
• Avoid speeding through or shortcutting the
requirement gathering process in hopes of
trying to go to market faster.
• Consider forming a team of sourcing specialists
who can drive effective use of sourcing tools,
strategies, and applications.
• Do your homework—spend the time and
effort to understand the category and
supplier market, define a sourcing strategy,
determine whom to invite, and ensure
supplier participation.
• Create a scalable category management
strategy supported by digital tools that
automate your ability to identify, analyze, and
control category costs so you obtain the best
value for every purchase.
• Ensure that stakeholder requirements are
detailed, accurate, and comprehensive to
prevent rework.
• For projects requiring sophisticated analysis,
use analytics built into your sourcing tool—
rather than Microsoft Excel—to support
compounding analytical complexity that may
quickly exceed spreadsheet capabilities.
What’s the benefit?
Customers who implement smart, easy-to-use
capabilities like guided sourcing and category
management improve compliance and gain insights
that lead to faster, better sourcing decisions.
Note: Sourcing cycle time is measured from the creation of a sourcing event
to when it is closed.
AVERAGE SOURCING
CYCLE TIME
Top-quartile
organizations see up to
4X FASTER
sourcing timesTop:
17 days
Average:
47.4 days
Bottom:
71 days
5 | 16
sourcing efficiency:
• Avoid speeding through or shortcutting the
requirement gathering process in hopes of
trying to go to market faster.
• Consider forming a team of sourcing specialists
who can drive effective use of sourcing tools,
strategies, and applications.
• Do your homework—spend the time and
effort to understand the category and
supplier market, define a sourcing strategy,
determine whom to invite, and ensure
supplier participation.
• Create a scalable category management
strategy supported by digital tools that
automate your ability to identify, analyze, and
control category costs so you obtain the best
value for every purchase.
• Ensure that stakeholder requirements are
detailed, accurate, and comprehensive to
prevent rework.
• For projects requiring sophisticated analysis,
use analytics built into your sourcing tool—
rather than Microsoft Excel—to support
compounding analytical complexity that may
quickly exceed spreadsheet capabilities.
What’s the benefit?
Customers who implement smart, easy-to-use
capabilities like guided sourcing and category
management improve compliance and gain insights
that lead to faster, better sourcing decisions.
Note: Sourcing cycle time is measured from the creation of a sourcing event
to when it is closed.
AVERAGE SOURCING
CYCLE TIME
Top-quartile
organizations see up to
4X FASTER
sourcing timesTop:
17 days
Average:
47.4 days
Bottom:
71 days
5 | 16