CEB Procurement and Operations Leadership Council

for Midsized Companies

Why Do Companies
Automate Supplier
Scorecard Tools?
Business Case Insights from the
Procurement Diagnostic Suite
 Procurement
organizations with
CLEAR BUSINESS CASE FOR AUTOMATED SUPPLIER
effective scorecard
automation extract more
SCORECARDS
innovative ideas from Number of Applied Supplier Ideas Function Cost a
their supply base at a A Proxy for Supplier Innovation Procurement Budget/Managed Spend
lower functional cost.
12 11 1.00%

■■ Companies that have 0.69%

automated scorecards 0.61%
extract more than twice 6 5 0.50%
the supplier innovation
and these companies also
operate at overall leaner
levels. 0 0.00%
Companies Companies Companies Companies
That Have an That Have No That Have an


That Have No
■■ They are able to do so, in Automated Automated Automated Automated
large part, because of the Supplier Supplier Supplier Supplier
efficiencies of automating Scorecard Scorecard Scorecard Scorecard
Platform Platform Platform Platform
the supplier scorecard
Source: CEB analysis. Source: CEB analysis.
process.
Percent of Budget Dedicated to Supplier Relationship Management

15% 14.5%
11.9%
Other budget line items
included sourcing budget,
8% management budget, and
transactional procurement
budget.

0%
Companies Companies
That Have an That Have No
Automated Automated
Supplier Supplier
Scorecard Scorecard
Platform Platform
n = 74.
Source: CEB analysis.
Note: CEB investigated 74 companies, of which 22 (30%) had an automated supplier scorecard platform, and 52 (70%) did not.
a
Applied to the average procurement budget of $5.9M, this results in a $680K savings on average.

© 2014 CEB. All rights reserved. PSC8060414SYN  2

 The use of automated
scorecard tools results
ADDITIONAL SUPPLY BASE EFFICIENCIES
in better leveraged and
rationalized supply bases. Spend Concentration
Percent of Spend Concentrated with Top 20% of Suppliers

■■ Efficiently generating
100% 94%
supplier performance
insights serves as a critical 79%
input to Procurement
organizations’ sourcing
50%
strategies.

■■ Effective scorecarding allows

Procurement functions 0%
to confidently award Companies That Have an Companies That Have No
business and build deeper Automated Supplier Automated Supplier
Scorecard Platform Scorecard Platform
relationships with a fewer Source: CEB analysis.
number of suppliers.

Spend-per-Supplier
Managed Spend/Number of Suppliers

$400
$319,000
Thousands (USD)

$200
$137,000

$0
Companies That Have an Companies That Have No
Automated Supplier

Automated Supplier
Scorecard Platform Scorecard Platform
Source: CEB analysis.
Note: CEB investigated 74 companies, of which 22 (30%) had an automated supplier scorecard platform, and 52 (70%) did not.

© 2014 CEB. All rights reserved. PSC8060414SYN  3

MERLIN AUTOMATED SCORECARD TOOL
Use CEB’s Merlin tool to extract more supplier innovation, drive down overall costs, and deliver supply base efficiencies.

Ready-Built, Best Practice Category Scorecards Web-Based Scorecard Automation Automated Performance Dashboard by Supplier

Senior
■ Office Supplies ■■ Packaging Manager
■ IT Software ■■ Market Data and Research R&D
■ IT Hardware ■■ Construction
■ IT Consulting ■■ Security
■ Travel ■■ Outsourced Providers Operations Accounts
Manager in Payable
■ Legal ■■ Waste Management Asia Analyst
■ Facilities Management ■■ HR Benefits PROCUREMENT
■ Direct Materials ■■ Printing Director of EU
VP of
Marketing
■ Temp Labor ■■ MRO Manufacturing
■ Telecom ■■ Marketing
■ Logistics ■■ Contract Manufacturing
■ Raw Materials ■■ Management Consulting VP of Latin VP of Sales
American at Supplier
■ Chemicals
Business

Features Features Features

■■ Access more than 25 category-specific scorecards. ■■ Leverage the web-based survey platform for an easy ■■ Receive performance dashboard cuts by:
■■ Customize KPIs to meet specific category needs. respondent experience. ■■ Region,
■■ Include both internal assessments and supplier self-
■■ Function,
■■ Deploy scorecards for up to 160 of suppliers. ■■ Internal versus supplier responses, and
assessments.
■■ Performance trending over time.
■■ Incorporate a mix of quantitative and qualitative KPI
questions. ■■ View performance comparisons against the aggregate
benchmark
■■ Map KPIs to a general respondent pool or to a single
respondent. ■■ Choose either quarterly, semiannual, or annual scorecard
■■ Gather performance data across cost, delivery, quality, frequency.
flexibility, partnership, and risk dimensions.

Source: CEB analysis.

Note: All services are included in the regular CEB Procurement and Operations
membership fee.

© 2014 CEB. All rights reserved. PSC8060414SYN  4

APPENDIX

Definitions

Procurement Personnel Costs:

All personnel costs that fall within Procurement function budget. Includes fully-loaded compensation (salary, bonus, benefits) for all Procurement staff.

Procurement FTEs: Includes:

a) Full and part-time Procurement employees dedicated to Procurement-related activities, including Procurement managers and administrative support; and
b) Contract and temporary labor FTEs who are managed as internal employees.

Procurement Budget:
The cost associated with running the Procurement function. This includes fully-loaded compensation, training and development, IT systems, professional services,
travel and entertainment, outsourcing costs, and facilities/overhead costs (excludes A/P costs).

Procurement Managed Spend: The total amount of organization spend that falls under a Procurement-developed contract or Procurement-initiated PO.

Contact your Account Manager or CEB

Procurement and Operations Leadership
Council for Midsized Companies to Sign Up

procurement.support@cebglobal.com

© 2014 CEB. All rights reserved. PSC8060414SYN  5