Top Procurement KPIs: What Really Matters in the Age of Automation

16.06.2025

Topic: Procurement

As companies increasingly embrace digitalization, procurement is evolving into a more strategic function. The Procure-to-Pay (P2P) process, in particular, offers significant automation potential—unlocking opportunities to use resources more efficiently and make procurement’s value contribution measurable. But how can success be meaningfully evaluated? The answer lies in the right Key Performance Indicators (KPIs).

Why Procurement KPIs Matter

KPIs serve as a compass for procurement leaders. They help assess process maturity, measure the ROI of automation initiatives, and guide strategic decisions based on data. Especially within the P2P process, KPIs help identify bottlenecks, enhance transparency, and improve acceptance of new technologies.

According to a survey by a global market research firm, 83% of respondents cited cycle time—from requisition to purchase order—as the most important metric for evaluating procurement performance. However, other metrics are equally vital.

The Three Most Important Procurement KPIs

1. Cycle Time from Requisition to Purchase Order
This KPI measures the time from the creation of a purchase requisition to the issuance of a purchase order. It directly reflects the efficiency and level of automation in the P2P process. Shorter cycle times indicate fewer manual steps, faster approvals, and an improved user experience—benefiting the organization as a whole.

2. Percentage of Transactions via E-Catalogs
43% of companies track the percentage of total spend processed through electronic catalogs. This KPI provides insight into the adoption of digital procurement tools and the degree of standardization. A high rate indicates process reliability, compliance, and streamlined access to preferred suppliers.

3. After-the-Fact Purchase Orders as a Share of Total Spend
Also tracked by 43% of companies, this KPI measures how many purchases are made retroactively—outside of defined procurement processes. A high percentage suggests weaknesses in process discipline, threatening transparency, cost control, and supplier management. The goal should be to minimize this figure through clear policies and seamless system integration.

KPIs as a Foundation for Automation Progress

These KPIs are not merely metrics—they provide the foundation for strategic investments in automation and technology. Only by understanding the current state can procurement teams make informed decisions about whether, for example, digital workflows or AI solutions make sense.

Leading analysts report that more than two-thirds of procurement leaders are planning targeted investments in AI, especially generative AI. However, without solid data foundations and initial steps in process automation, the path to solutions that generate real value often remains blocked.

Conclusion: KPIs as the Key to the Future of Procurement

In an increasingly tech-driven procurement environment, KPIs are essential. They reveal automation potential, drive process optimization, and help showcase the strategic value of procurement. Procurement leaders who rely on clear, relevant metrics lay the groundwork for informed decision-making—and position procurement as a true value driver within the organization.