Coupa Software Inc.

06/13/2025 | Press release | Distributed by Public on 06/13/2025 13:08

Procurement Benchmarks & KPIs: Measuring What Matters

In a world where disruption is constant and speed sets the winners apart, data is your most valuable asset. But it's not about having more data. It's about having the right data. That's why procurement benchmarking and KPIs are essential for companies aiming to make faster and more confident decisions.

Benchmarking performance against peers helps expose inefficiencies and unlock untapped value. Take AI-powered classification: Is it worth the investment? According to Coupa's latest Benchmark Report, companies using it see a 24.4% increase in visibility into managing spend. That kind of precision opens the door to smarter supplier management, cost reduction, and faster decision-making, especially in volatile markets.

24.4%
increase in visibility of managing spend outside the procurement system with AI-classification

These benchmarks aren't just important for procurement leaders. They're essential for finance teams, too. Both functions are tasked with optimizing operations costs, unlocking capital for growth, and building business resilience. Benchmarking provides a shared view of performance, helping both teams align on strategies for maximum impact.

Get 20 KPIs from a network of 10 million buyers and suppliers and $8 trillion in real-world spend.

Explore the KPIs That Matter Most to You

What are procurement benchmarks?

Procurement benchmarks are procure-to-pay or source-to-pay key performance indicators (KPIs) that help companies evaluate how their procurement function stacks up against peers and industry standards. They are all about understanding how a company's internal procurement processes impact its ability to operate at optimal levels.

These benchmarks, which can be broken down into six categories, cover everything:

  • Cost savings benchmarks track how effectively procurement reduces spend against budgets or market rates. For example, identifying categories with low negotiated savings compared to peers spotlights where renegotiating contracts or competitive sourcing could improve results.
  • Spending visibility measures how much of an organization's spending is classified and under management. For instance, improving visibility from 65% to 80% can reveal duplicate vendors or off-contract purchases.
  • Supplier performance benchmarks reveal metrics like on-time delivery, quality, and responsiveness, enabling teams to pinpoint underperforming vendors and improve or consolidate higher-value, reliable supplier relationships.
  • AP automation benchmarks access invoice processing speed, error rates, and touchless processing levels, enabling teams to spot inefficiencies, reduce late payments, and free up working capital through faster cycle times.
  • ESG performance evaluates how well a company's procurement aligns with environmental, social, and governance goals, such as increasing spend with diverse suppliers or reducing emissions in the supply chain.
  • Risk management benchmarks measure a company's ability to anticipate and mitigate supply disruptions or compliance issues. Having active risk assessments for suppliers or alternative sourcing plans helps reduce exposure to geopolitical or economic impacts.

Strong benchmarking doesn't just improve performance - it enables smarter, end-to-end decision-making. Companies with mature benchmarking capabilities are better positioned to adopt design-to-pay, a holistic approach that integrates product design, sourcing, procurement, and payment into one seamless, data-driven workflow.

Most procurement leaders follow a structured benchmarking process that includes:

  1. Collecting internal performance data across intake, sourcing, supplier management, contract compliance, and invoice processing.
  2. Comparing that data to external industry benchmarks, often segmented by company size, geography, or industry.
  3. Identifying performance gaps or deviations that signal opportunities for improvement.
  4. Aligning on and prioritizing actions based on business impact, such as reducing costs, increasing speed to value, or improving risk management.
  5. Tracking improvements over time to ensure progress and adjust strategies as the business environment changes.

A continuous process of measurement, comparison, and improvement sharpens procurement's performance and makes it easier to collaborate with finance and other stakeholders on shared goals.

Best practices for procurement benchmarking

To get real value from benchmarking, you need more than just numbers. You need a strategic, repeatable process rooted in high-quality data. Here are the best practices procurement teams should follow.

Define clear objectives and map them to target KPIs

Start with the "why." Figure out if reducing costs, improving invoice processing times, or increasing ESG alignment are your objectives so you can select the most relevant KPIs to track and benchmark.

*Source: The Strategic CFO Report

Benchmark against the right data - not just any data

Having the right benchmarking data can make all the difference. Public data and survey-based benchmarks from third-party firms often rely on outdated or self-reported metrics. Coupa's community benchmarks, on the other hand, are built from $8 trillion in ethically sourced, anonymized, and aggregated real-world global spend data. This powerful database fuels our AI models, enabling prescriptive recommendations, automated actions, and dynamic benchmarks that no other provider can match.

Standardize data collection and analysis

Benchmarking well starts with accurate and complete internal data. That means establishing definitions for metrics across teams and ensuring data is collected uniformly. The problem is that most procurement teams rely on multiple systems and point solutions, which makes data fragmented and disconnected. Getting a true picture of organizational spending and processes is nearly impossible.

A centralized database or total spend management platform is needed to track and analyze both direct and indirect spending across regions and business units. This kind of centralized visibility ensures you're benchmarking against a true view of your procurement performance. Without it, you risk comparing incomplete data and missing critical opportunities for improvement.

Leverage AI to streamline and strengthen your benchmarking process

Use AI tools to improve your benchmarking capabilities drastically. AI-powered data classification, anomaly detection, and predictive analytics can categorize and analyze large volumes of spend and processes with far greater speed and accuracy than traditional methods, unlocking near real-time visibility and scaling power.

Where finance fits in

Of course, procurement benchmarking doesn't live in a silo. It supports broader business goals, especially for finance teams under pressure to do more with less. The insights unlocked through procurement KPIs help finance leaders align cost control with growth, resilience, and value creation.

Here's how finance can (and should) plug into procurement benchmarking:

  • Base every decision on facts, not assumptions: Coupa's AI-powered benchmarks are built on trusted, secure, and real-world data, giving finance teams the confidence that every decision and strategy they undertake is grounded in fact.
  • Create value at scale: Identify where money is being tied up, whether it's trapped in manual processes, fragmented systems, or transactional busywork.
  • Lead through volatility with real-time visibility: Static strategies and processes will fall short. Benchmarking reveals which investments will deliver the highest impact, helping teams respond quickly to supply shortages, cost spikes, or regulatory changes.
  • Unlock capital for growth by uncovering hidden value in your spending: These measures can reveal hidden costs that can be reinvested into innovation, expansion, or strategic initiatives.
  • Proactively de-risk the business by identifying vulnerabilities: Benchmarks help surface areas of overdependence, underperformance, or compliance risk within the supplier ecosystem. With this visibility, finance and procurement can address risk and exposure together.

Together, finance and procurement can turn benchmarking insights into enterprise-wide impact to remain competitive in today's uncertain economic climate.

Top 8 procurement KPIs to benchmark

If you want to improve procurement performance, you need visibility into how money moves, how suppliers perform, and where processes break down. These eight benchmarks are the ones procurement and finance leaders rely on to do just that. Each one highlights a different aspect of performance, and together, they give you the clarity needed to take control of the procurement function and steer your strategy with confidence.

1. Visibility of managed spend

Measures: The growth in spend under management using AI classification capabilities to capture spend previously outside the procurement system

Primary benefit: When more spending is accurately categorized and brought under management, procurement gains the visibility needed to reduce maverick spending, enforce policy compliance, and unlock opportunities for savings.

Why it matters:

  • The higher visibility of managed spend, the more accurate categorization for analyzing
  • Better categorization means clearer insights, stronger sourcing strategies, and a more complete picture of where money is going and where it shouldn't be
  • Deeper insights into what purchases are made from whom, where, when, and why

2. Spend control

Measures: The total percentage or dollar amount of spend reduced through sourcing events, contract negotiations, demand management, and process efficiencies

Primary benefit: Quantifying the value created through cost savings demonstrates procurement's direct impact on the bottom line, enabling leaders to make a strong case for investment, resources, and strategic influence.

Why it matters:

  • Frees up capital for reinvestment into innovation, growth initiatives, or margin-multiplying
  • Builds resilience by creating cost buffers to help the business navigate economic uncertainty
  • Strengthens procurement's credibility as a proactive, data-driven partner, not just a back-office function

"Our industry can't rely on a significant increase in activity next year to drive earnings growth. We must think about how we minimize spend to deliver improved earnings in a low-to-no growth environment."

- David Schorlemer, CFO, ProPetro Services

3. Contract management cycle time

Measures: The time between requesting a contract and the contract being signed by the supplier

Primary benefit: Shorter cycle times accelerate time-to-value, helping teams respond faster to business needs, reduce bottlenecks, and capture savings opportunities before they slip away.

Why it matters:

  • Improves agility by enabling teams to onboard suppliers and launch sourcing events more quickly
  • Reduces risk by minimizing the gaps between negotiation and education, where compliance issues or outdated terms can arise
  • Drives consistency and efficiency by encouraging standardized workflows and automation across contract creation processes

4. Requisition-to-order cycle time

Measures: The average time it takes from the initial request of a purchase to final PO approval

Primary benefit: A shorter requisition-to-order cycle time ensures employees have the materials they need when they need them, especially mission-critical materials, even when conditions change.

Why it matters:

  • Enhances operational agility by accelerating the procurement of goods and services needed to support business operations
  • Improves user experience and compliant purchases for internal stakeholders by minimizing delays and unnecessary approvals
  • Reduces the risk of missed opportunities due to lag time between identifying a need and placing an order for fast-moving categories or volatile markets

5. Spend with primary suppliers

Measures: The percentage of total spend directed to the company's preferred or strategic suppliers

Primary benefit: Reducing the number of tail suppliers and consolidating spend with trusted suppliers generates value through negotiated contracts, greater buying power, and more favorable payment terms.

Why it matters:

  • Increases purchasing power with the consolidation of spend, leading to better terms and discount levels
  • Improves supplier performance through deeper collaboration, stronger accountability, and shared long-term goals
  • Reduces operational risk by limiting reliance on unknown or non-compliant vendors

6. Pre-approved spend

Measures: The percentage of the amount of invoiced spend linked with approved POs

Primary benefit: Pre-approved spend improves compliance and cost control by allowing finance and procurement teams to inspect and validate purchases before funds are committed. This helps the business stay within budget and preserve working capital in near real time.

Why it matters:

  • Increases financial discipline by aligning purchases with budgets, policies, and procurement strategy
  • Reduces maverick spending that falls outside negotiated contracts or preferred supplier agreements
  • Improves data quality by capturing spend details up front, making reporting and generating accruals more accurate and efficient

7. Electronic invoice processing

Measures: The percentage of invoices submitted, approved, and processed through an electronic, automated system

Primary benefit: Higher electronic invoicing percentages accelerate the payment cycle, reduce errors, and improve visibility into cash flow.

Why it matters:

  • Enables AP to optimize payment timing to either maximize Days Payable Outstanding (DPO) or capture early payment discounts
  • Incorporates AI fraud detection to catch issues before a payment is processed, saving valuable time and money
  • Improves financial visibility by providing real-time insights into liabilities, accruals, and cash flow positions

"Coupa gives you predictive analytics based on your spend, seasonality trends, and how you're benchmarking against your peers. That's really important that you're just not comparing yourself internally, but also to external benchmarks."

- Abhinav Chaudhary, Regional Manager, Strategy Sourcing, BlueScope

8. Supplier information management cycle time

Measures: The time it takes for suppliers to respond to digital requests to update their information

Primary benefit: A faster, more automated supplier information management process reduces operational delays and accelerates agility.

Why it matters:

  • Improves agility by making it easier to collaborate with suppliers to respond to market shifts (such as new tariffs) or sourcing needs
  • Reduces compliance risks by enforcing standardized reviews for regulatory, financial, and ESG criteria
  • Boosts efficiency by cutting down on manual processes, back-and-forth communication, and redundant data entry across different systems

Inform your procurement benchmarking with Coupa's Benchmark Report

When margins are tight and volatility is the norm, finance and procurement must work in sync to control costs, unlock value, and stay competitive. Benchmarking is the foundation for alignment for these departments, offering a clear view into how top-performing companies operate and build strategies that deliver measurable results. Patrick Reymann, Research Director, Procurement and Enterprise Applications at IDC, says benchmarking is one of the most valuable practices an organization can implement.

But don't trust just any benchmark data. Ensure you're using real-world, accurate benchmarks with Coupa. They're fueled by $8 trillion in ethically sourced, anonymized global spend data from a network of 10 million buyers and suppliers across regions and industries. With Coupa's AI-native Total Spend Management platform and real-world benchmarks, finance and procurement teams are identifying hidden gaps and driving operational excellence - together.

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Coupa Software Inc. published this content on June 13, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 13, 2025 at 19:08 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at support@pubt.io