Sheet 1: Instructions

	
	

		
PROCUREMENT MATURITY MODEL V2.1
	
	

		


	
	

		
DESCRIPTION
	
	

		
The purpose of the Procurement Maturity Model or "PMM" is to provide a comparison of the current practices of a procurement department to objective and qualitative best practices in procurement.  The best practices provided in the model were based on a variety of sources, and the best practices are categorized by Measurement Area and Measurement Element.  In the PMM Rating Input and Scores tab, the user inputs his or her Your Rating for a particular best practice based on the Current Practice, and formulas then calculate a rating based on the associated weighting.  The %age Difference Between Your Score and Best Practice Score column indicates, by color, areas for possible improvement.

	
	

		
The Measurement Area Scores tab (hidden) then summarizes the consolidated Measurement Areas against best practices and provides an overall PMM  score.  The Graphed Measurement Area Scores tab is a graphical representation of the PMM score.

Finally, the PMM Comparison Calculation tab (hidden) calculates data to populate the Graphical PMM Comparison tab, which compares the scores of the input procurement department against different maturity levels, including world class.
	
	

		


	
	

		
INSTRUCTIONS / NOTES
	
	

		
While this model represents best practices for the type of procurement department indicated under the Assumptions tab, the model can be customized as needed.
	
	

		
Measurement Areas and Measurement Elements can be added or deleted, provided that Weighting is adjusted to equal 100% per Measurement Area.
	
	

		
Weighting can be adjusted, provided that total of Weighting equal 100% per Measurement Area.
	
	

		
Weighting data is contained in hidden columns.  See "Tab Descriptions" for more information on weighting criteria.
	
	

		


	
	

		
TAB DESCRIPTIONS
	
	

		
Assumptions - Describes the organizational profile of the procurement department most applicable to the PMM.
	
	

		
PMM Rating Input and Scores - Describes the Measurement Area, Measurement Element, Current Practice (ranked by point-based rating), Your Rating (an input of the Current Practice point-based rating), Weighting (hidden column "E"), Your Calculated Score, Best Practice standard, Best in Class Rating (hidden column "H"), calculated Best Practice Score, Calculated and Area Weighted Variance (hidden column "J," used to determine variance between Your Calculated Score and the Best Practice Score), Significance of Gap (color-coded to indicate areas of possible improvement), and Measurement Area Weighting (hidden column "L").
	
	

		
Measurement Area Scores - Summarizes Your Measurement Area scores and adjusts the scores by additional Weighting (hidden column "D") criteria to calculate the Adjusted Your Measurement Area Score.  An Overall PMM Score is also calculated.
	
	

		
Graphed Measurement Area Scores - A graphical representation of the Adjusted Your Measurement Area Scores compared to the Adjusted Best Practice Measurement Area Scores contained in the Measurement Area Scores tab.
	
	

		
Graphical PMM Comparison - A graphical representation of the different levels of the PMM model and how your procurement department compares.
	
	

		


	
	

		
COLOR LEGEND
	
	

		
Indicates an input area
	
	

		
Indicates a calculation
	



Sheet 2: Assumptions

	
	

		
ASSUMPTIONS
	
	

		
The best practices contained in the Procurement Maturity Model are based on a procurement department with the following attributes:
	
	

		
At least $50M in spend.
	
	

		
Spend is predominately for indirect commodities.
	
	

		
Commodities are predominately domestic.
	
	

		
There is more than one staff person; each staff person is 100% dedicated to the procurement function.
	
	

		
The procurement function does not include ancillary functions, such as warehouse management or traffic management.
	
	

		


	
	

		
DISCLAIMER
	
	

		
The PMM is not based on empirical data, nor are the results statistically objective.  Rather, the PMM was developed using real-world expertise from a variety of procurement professionals with an intent of creating a useable versus scientific model.