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Project & Procurement Management Benchmark Report
Why collaborative sourcing and efficiency of collaboration organically creates business opportunity and how you stack up to your peers.
What we discovered
Efficiency of collaboration organically creates business opportunity
Collaborative change management and reporting is critical
Work is more work than you think
Time is running out
Teams which collaborate and employ collaborative sourcing strategies see significant cost savings per project and can manage projects more efficiently.
Project teams which collaborate on a central platform are able to manage change better and write significantly fewer change orders per project.
Employees are more productive when using a system which allows reportable, enforceable business processes.
Projects are becoming more customized and complex, but turn times are remaining the same, requiring businesses to turn over greater complexity in the same amount of time.
Methodology
Noosh is a project and procurement platform for business service providers. Our data set represents $12B in transactions from some of the world’s largest and most influential brands. We analyze this data to look at industry-wide trends. Our market segments include marketing and print service providers, engineering services, major syndicated media, and enterprise shared services. We’ve also surveyed the industry at large to provide industry perceptions of several trends.
In this report we share some of the most interesting takeaways we’ve found as we combed through the dataset for the years 2010-2013. Read on for reports on collaboration, project management, and benchmarks representing top project and procurement management practices.
Collaborative Sourcing
Collaborative sourcing events lower
overall project costs by an average of 20.7%.
The act of “collaborative sourcing” (multiple bidding on one central platform) results in 20.7% average savings, when comparing the lowest estimate versus the average of all estimates.
Optimize projects for a true multiple bidding scenario when appropriate to drive down project costs.
Collaboratively Sourced Projects Traditionally Sourced Projects
Pr
oject Costs
Savings from Collaborative Sourcing
Project 1 Project 2 Project 3
Final Cost
Final Cost
Order Value
Number of events per project and
project’s dollar value are positively
correlated.
Correlation between Average Number of Events and Average Project Value*
R² = 0.9655 0 20 40 60 80 100 Av er ag e Pro jec t Val ue
Average Number of Events $25k $20k $15k $10k $5k $0
Value of orders on highly collaborative projects is higher than those with fewer collaboration events.This implies that as project values increase, more
collaboration is necessary to successfully bid, win, and execute projects.
Compete for bigger business by leveraging efficient, structured, and reportable collaborations.
Savings
*99.9% Confidence Interval for Average Percent Savings, Based on Number of Estimates Received The meaning of the 99.9% confidence for a particular group of RFEs is that there is 99.9 percent probability that the true mean of the average percent savings for that group is captured within the confidence interval. 0 2 4 6 8 10 10% 15% 20% 25% 30% 35% de vie ce R s et a mit sE fo re b mu N
Average Percent Savings
Average Percent Savings with 99.9% Confidence Interval*
Optimal savings (with 99.9%
confidence interval) is between
4 and 6 estimates per project.
Collaborative sourcing has been shown to lower overall project costs, but the average you save increases as you receive more and better estimates. Establish a reliable community of suppliers to support your multiple bidding efforts.Change Orders
Users manage change better than industry
to reduce costs, resulting in substantially
fewer change orders.
32.6% of all professionals surveyed believe that
change orders are a commonplace, if not necessary, part of the project and procurement process. Noosh users manage change at a much more efficient rate, some 94.7% of all order values remain unchanged or become less expensive throughout the management cycle, implying change orders that increase costs are written for only about 5.3% of all orders.
Utilize a central repository for all project-related
communications and information to reduce error and missed information.
Percent respondents who believe change orders happen “nearly all the time” or “very frequently.”
Percent of orders with change orders that increase costs
Change Management by Industry Perception
Change Management by Noosh Users
32.6%
Project Reports & Their Importance
Metric Importance of Report Ability to Report
to Business
Specification quality Only 30.2% of respondents rate their company’s ability as Extremely Well Only 30.2% of respondents rate their company’s ability as Extremely Well Only 39.5% of respondents rate their company’s ability as Extremely Well Extremely Important, 65.1% of the time Extremely Important, 60.4% of the time Extremely Important, 67.4% of the time
Quote estimate and
response time by customer Order (project) turn time
Surveyed professionals find project metrics to be critical to business
operations, but are unable to adequately report standard processes.
Average Spend
Top 20% of Noosh users are able to
manage over $7.9M or more
on average per year.
Average Noosh users are able to manage an average $1.9M per year.
Optimize your buying and procurement processes and enforce with reporting to
ensure optimal employee productivity. Per
cent of Users
Spend Managed per User per Year
25% 20% 15% 10% 5% 0% $100K $200K $300K $500K $700K $1M $1.3M $1.5M $1.7M $2M $3M $5M $7M $10M More
[
Average Noosh User Top 20%[
Employee Productivity
Top 20% of users on average manage 2009 or
more line items per year, 3.6x the average.
44.3% of surveyed professionals say they (or their employees) manage 250 line items or less per year, 30% of which say they manage less than 175 items per year. Average Noosh users manage 553 line items per year, and best in class Noosh users manage 3.6x the overall system average.
Set and enforce structured collaboration processes to greatly increase employee productivity.
Project Collaboration
An average project team has 6.9 members and collaborates with 4.1
companies per project.
Research shows that more collaboration is required to execute higher value projects, and average projects require more collaboration than one might think.
Use a central location for all project-related communication, files, and specifications to maintain a reportable single system of record to prevent costly rework and mistakes.
Project Events
Every project has an average of 33 fully-reportable collaborative events.
Collaborative events, such as a file upload, request for quote, receiving an estimate, orsharing spec details are common to completing projects, but they are often locked inside email and spreadsheets. This bottleneck prevents important reporting to gain critical
business insights as well as accurate expectation management for clients and executives. Optimize your projects for structured collaboration with fully-reportable collaborative
Project Complexity
Projects have become 48% more
complex in the last 4 years.
Total deliverables per project have grown by 48% since 2010, but turn times have
remained steady, with 60% of projects being completed in the first 29 days. This implies that businesses must execute increasingly complex projects without increasing turn times to compete.
Understand how to reduce your turn times by discovering bottlenecks in processes through reporting. Number of Items Year 2010 2011 2012 2013 4.00 3.50 3.00 2.50 2.00
Project Practices
Total quantities per line item are dropping,
and percent of small orders is increasing.
Custom orders, small runs, and targetedmarketing campaigns are changing the project and procurement management
process -- 51% of all orders have fewer than 1000 pieces. Large order quantities remain steady, but mid-size orders are rapidly
shrinking.
Optimize your processes to handle small batch orders and custom targeted work more efficiently. 42% 22% 44% 22% 46% 23% 50% % of all Or ders Year 2010 2011 2012 2013 55% 50% 45% 40% 35% 30% 25% 20%
Small Quantity Orders Large Quantity Orders Mid-Quantity Orders
35% 34%
31%
28% 22%
Estimate Turn Times
31.5% of users receive first estimates
within 1 hour of submitting an RFE.
Collaboratively sourcing RFEs on the Noosh platform allows 31.5% of users to have a first estimate in-hand within 1 hour, and 50.3% of users see a first estimate within 3 hours.
Leverage smart technology choices to create continuous business value for your customers. Estimate <1 hour Estimate 1 - 3 hours Estimate 3 hours - 1 day Other Time to First Estimate
31.5%
23.2% 28.1%
