The economic development of an enterprise largely depends on qualified and correct decisions in the purchase department. The situation in which the decisions are taken becomes increasingly complex while the cost pressure remains constant or increases. On this background strategic procurement management has become a topic of discussion at board level. This high interest in procurement successes is in most companies not matched by appropriate and sound reporting and controlling systems. If procurement controlling is to keep its significance as a managerial guidance and coordination instrument it is necessary to reconsider its position and its instruments. Questions concerning the efficiency of the deployed controlling instruments will arise at the latest when a crisis must be managed.

Central questions

Procurement controlling helps to answer the following questions:

• What is the relationship between the deployment of tools and the results of procurement?
• What is the meaning of Best Practice in procurement?
• What is the added value of purchasing and what costs must be balanced against it?
• Are there any gaps in performances and can they be closed?
• What are the potentials and how can they be put to use?

The modular system

Procurement controlling must always be modular. One must fundamentally distinguish between an information and a reporting system.

An information system delivers data relevant to the fields of controlling.
A reporting system consolidates the results using indicative values.

The analysis and evaluation of purchase services from different points of view makes managerial indicative values transparent and understandable. These data needed for the guidance of strategic procurement are available nearly in real time.

Information system Data relevant to decisions Data concerning • Purchase • Project • Company   Reporting system Indicative values concerning • Cost reduction of materials and processes • Cycle time • Supply rate • Purchasing efficiency

The significance of controlling in procurement will continue to increase because it is the key to short reaction times and higher operative and strategic flexibility in the market. There is hardly a company which asks itself whether it needs this key – only when and how it fits.