Maturity Matters: Performance Determinants of the Procurement Business Function

The procurement business function is increasingly recognized as strategic and subject of performance management. In this paper we present a research model to decompose the procurement function by six maturity dimensions (strategy, e-technology, process, information, monitoring and organization). The model is based on the proposition that an organizations’ procurement performance is positively related to its procurement maturity. In addition, we hypothesize that the alignment between the different procurement maturity dimensions positively effects the maturity-performance relation. A survey was conducted among 117 Dutch organizations from various industries and size categories, to apply the research model and test the hypothesis. From regression analysis we found significant positive, and stable net effects of procurement maturity on procurement performance. Alignment did not effect the shape of the maturity-performance relationship, but (by one type of measurement) it does increases the strength of the relationship. We conclude that our research model supports procurement maturity assessment and benchmarking for organizations, to improve their procurement business function in an integrative way.