Almost 50 per cent of buyers use technology to select suppliers

28 November 2011

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28 November 2011 | Adam Leach

Just under half of buyers are using technology to help them choose vendors with 48.4 per cent identifying it as a key use for IT, a survey has found.

Procurement Systems & Skills: Are we in balance?, published today by Edbury Daley, also found technology continues to be important once a preferred vendor has been selected. It reported that 45.3 per cent of buyers use it to help them find their best price while 18.8 per cent use it reach agreement on price. 

Analysing the findings, report authors of the survey, which was completed by 756 procurement professionals, said: “Perhaps this indicates a high reliance on e-auctions, which will be fine in more tactical market places but we would question their effectiveness in more strategic, value-based negotiations.”

In terms of the overall value provided to the business through procurement technology, the survey indicated that it helps to ensure people are better informed and the strategy is more cohesive. A total of 54.7 per cent said their business now “largely follows” the procurement process as a result of technology. Slightly more (57.8 per cent) said it had enabled them to improve management information, which has in turn resulted in better, timelier decisions.

However, its importance in more strategic areas was less pronounced with just a quarter of buyers identifying it as a strategic enabler. And 10.9 per cent of those surveyed said: “Systems generally create more ‘noise’ than ‘value’ for me.”

Speaking during a recent CPO Agenda webinar, Chris Campbell, commodity sourcing manager at HSBC, said in the case of spend technology, the key to maximising the benefits is collecting good data. He said: “Unless the data can be collected effectively then it’s not going to work.” In order to improve collection, he recommended sending out an example of the data required, so suppliers and stakeholders can see what format to provide it in.



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