06/13/2025 | Press release | Distributed by Public on 06/13/2025 13:08
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.
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.
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:
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:
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.
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.
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
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.
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.
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.
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:
Together, finance and procurement can turn benchmarking insights into enterprise-wide impact to remain competitive in today's uncertain economic climate.
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.
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:
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:
"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
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:
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:
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:
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:
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:
"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
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:
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.