Importance of Procurement

IBIS recommended calculating the value of your institution's non-pay spend as a proportion of its total expenditure. This figure shows the importance procurement within the institution. It is usually somewhere between 30-40% however in a period of major capital expenditure the percentage may be higher. Within non-pay spend, there will be an element that will not fall under the influence of procurement and this should be identified and displayed once the expenditure analysis is completed. However, even when the figure is adjusted for, for example, payments to the Inland Revenue etc the total value of the expenditure on goods and service is significant.

The professional procurement influence and arrangement type analysis can be presented, in percentage terms, against both the total and the non-pay spend values. This presentation of the non-pay expenditure in percentage terms enables year-on-year comparisons to be made within the institution. It also enables cross-institutional comparisons to be made.