07 July 2008 | Steve Bagshaw
If you are going to have successful KPIs you must follow the 10 "golden rules".
And according to Giuseppe Conti, global purchasing director outsourcing & services at Swiss perfumery and chemical producer Firmenich, you should want them because measurement is the key target procurement directors are assessed on.
Speaking at the European Procurement Summit in Switzerland last week he said the rules are:
* Make them consistent with your objectives and strategy.
* Adapt them to the maturity of your organisation, i.e. if yours is a mature function you won't need to justify yourself through cost-cutting alone.
* Know which are the correct KPIs for the right audience and know the language of various stakeholders.
* They should accommodate multiple perspectives and the champions of the KPIs should be comfortable with flexibility.
* They should measure what is easy to measure and what is important.
* They should be SMART.
* The KPIs should be visual and therefore easily demonstrated.
* You should compare them with your peers' indicators, then you can do something about it if you come up short.
* Keep the number of them small, otherwise you will do nothing else but measure them.
* Establish processes to take corrective action.
These will enable buying leaders to deliver and demonstrate their achievements.