Abstract
Supply performance measurement is a widely discussed topic with numerous concepts, frameworks, and even more important: best practices. They were created for measuring supply management's overall performance. Nevertheless, it is not clear yet if they are valid for measuring supply management's bottom line impact as well. Therefore, as a first step in approaching this fuzzy topic of measuring supply management's financial effectiveness, the measurement background is provided within this chapter. The relevance of measuring supply management's financial effectiveness is the focus in 2.1. Supply management's perception, its required scope of responsibility compared with its status, and the resulting perception gap are discussed from a principal-agent perspective due to the required change of existing systems and introduction of a new mindset. Having shown the necessity of measuring financial effectiveness, existing performance measurement approaches are analysed regarding their adequacy for this particular measurement issue in 2.2. Since obviously no established performance measurement system fits the measurement requirements of the newly defined ‘Return on Spend’, which primarily focuses on savings as an effectiveness indicator, the decision was taken to develop an innovative process for measuring supply management's financial effectiveness, with the focus on the savings refinement. The initial draft of the process design is presented in 2.3, specifying design sciences as an adequate research approach.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Rights and permissions
Copyright information
© 2010 Gabler | GWV Fachverlage GmbH
About this chapter
Cite this chapter
Quitt, A. (2010). Supply Management’s Financial Effectiveness – ‘The Story Behind it’. In: Measuring Supply Management’s Budget Effects. Gabler. https://doi.org/10.1007/978-3-8349-8490-6_2
Download citation
DOI: https://doi.org/10.1007/978-3-8349-8490-6_2
Publisher Name: Gabler
Print ISBN: 978-3-8349-2110-9
Online ISBN: 978-3-8349-8490-6
eBook Packages: Business and EconomicsBusiness and Management (R0)