Outsourced cost to perform the procurement process group per $1 billion purchases
This measure calculates the outsourced cost per $1 billion purchases to perform the procurement process group, which includes the business activities of procurement planning, purchasing, sourcing, and inventory management. Further functions include sourcing strategies, selecting suppliers, and developing contracts, ordering materials and services, and appraising and developing suppliers. Outsourced cost refers to the total cost of outsourcing a specific process to a third party, except one-time charges for any type of restructuring or reorganization. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "procure materials and services."
Benchmark Data
25th | Median | 75th |
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Compute this Measure
Units for this measure are dollars.
(Total cost to perform the process group "procure materials and services" * Percentage of total procurement cost allocated to outsourced cost * .01) / (Value of all materials and services purchased * 0.000000001)