ROSMASM Performance Check
Having visibility into procurement's financial contributions is vital to an organization's operational and financial success. It also allows you as a procurement professional to demonstrate your value and justify your involvement in future decisions.
ISM, along with CIPS (Chartered Institute of Procurement & Supply) and A.T. Kearney, is pleased to offer the ROSMASM (Return on Supply Management Assets) Performance Check, a complimentary performance-benchmarking service that allows the supply management global community to consistently measure financial contributions to their companies.
Derived from classic financial frameworks and co-developed with leading CPOs and CFOs from multinational companies, the ROSMA Performance Check serves as a means to attract the recognition of the C-suite and identify improvement opportunities for procurement. In addition to having access to an annual benchmark of the industry, it gives your procurement team a quantifiable assessment based on hard financial results, providing stakeholders and shareholders with a clearer understanding of how procurement's activities influence output.
Every organization has a mix of performance objectives, metrics, and scorecards. The ROSMA Performance Check offers the financial piece for procurement's balanced scorecard. Best of all, it takes no more than 45 minutes to complete. Once completed, participants instantly receive a customized feedback report.
The ROSMASM Performance Check can be completed by various supply management level (for example, enterprise, division, or business units). The estimated completion time is just 30 to 45 minutes.
Upon completion, you will receive a customized feedback report that assesses your procurement performance, compares it to the industry, and highlights improvement opportunities. Additionally, you will receive a ROSMA score — a unique feature inherently useful in its applicability as a standardized indicator of your team's performance productivity.
As the ROSMA Performance Check is part of a quantitative measure, you should have data on hand that includes annual firm revenue and net income, total spend, percent of procurement-influenced spend, percent of the influenced spend that was sourced in a year, estimated hard and soft savings and benefits information, and the characteristics of your procurement group.
In addition, ISM can work with you to identify training programs targeted at improving the developmental areas highlighted in your feedback report.
The ROSMA Performance Check gives the procurement and supply management community a repeatable and universal measure to highlight financial performance worldwide — opening the gateway for the business community to fully understand procurement's efforts and how they relate to shareholder value.
Additionally, the customized feedback you receive includes a unique ROSMA score that benchmarks procurement performance against procurement leaders and followers, and highlights improvement opportunities. You will be positioned with a quantifiable means to gain credibility and increase your profile as a strategic business partner. Ways in which the ROSMA Performance Check can benefit you, as procurement professional, include the following:
- Start a constructive conversation. CPOs can articulate procurement's financial contributions consistently to the enterprise and C-suite and facilitate constructive conversations with CFOs. The ROSMA Performance Check also helps shape your procurement team's agenda, identify priorities, and steer your supply management team toward a results-driven mindset and leadership model.
- Identify priorities. The ROSMA Performance Check highlights improvement areas — showing where your procurement team should concentrate its efforts to advance performance and ensure your organization is headed in the right direction.
- Track performance. Using the ROSMASM score to evaluate your performance, your procurement team can track and gauge how well it improves over time.
- Develop talent. Using the improvement opportunities uncovered by the ROSMA Performance Check, you can develop talent, including how and where to grow the procurement team, and identify beneficial training programs.
What Is It?
The ROSMA Performance Check is based on a framework using proven financial standards and principles to measure procurement's efficiency in delivering financial contributions to your business. It is the classic return on investment model for procurement or supply management, as it compares financial values delivered by the team to departmental investments.
The ROSMA metric indicates the overall financial productivity of your supply management assets (people, technology, and other identifiable investments). It captures both conventional hard savings benefits and the tangible value created from more advanced best practices, supplier innovation, and financial re-engineering of the supply chain. With it, you can document, track, and compare efforts annually and with industry followers and leaders, gaining clarity into the areas that positively or negatively impact your procurement organization's operations. As a result, ROSMA becomes an important part of your organization's balanced scorecard.
The questions in the ROSMA Performance Check focus on the following seven factors that have the greatest influence on procurement's performance. The individual feedback report uses these factors to calculate a ROSMA score and show you which areas require the most attention for greater financial return.
- Spend coverage. Total third-party spend that procurement influences, along with recommendations to increase visibility into and governance of that spend.
- Velocity. Speed at which influenced spend is addressed.
- Category yields. Focus on all the hard, tangible savings gained from spend.
- Compliance. Level of visibility and enforcement of negotiated agreements and policies.
- Additional benefits. Other hard financial benefits not already captured, such as working capital improvement, supplier performance, or supplier-enabled innovation.
- Period cost. Periodic costs, such as people costs or external support costs.
- Structural investments. Procurement infrastructure and capabilities development costs.
Visit A.T. Kearney's ROSMA page for more information.
We are happy to have one of our professionals answer any questions you have about ROSMA, the new standard for the procurement and supply management community. Contact us today: