Fewer than half of firms use e-sourcing

8 August 2012

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8 August 2012 | Kamalpreet Badasha

Just 46 per cent of organisations used e-sourcing tools for purchasing processes last year, even though 60 per cent said the benefits outweighed the costs.

A study by consultancy State of Flux, eSourcing Report 2012, found although e-sourcing tools – such as electronic RFx, sourcing and e-auction technology - have existed for around 15 years, they are under-utilised. Some 62 per cent of respondents have used them for less than five years and 70 per cent said they have never used contracting functionality. This was attributed to factors including the complexity of tools and a lack of investment in training users.

“The money and effort put into acquiring the tool is usually far greater than the investment put into embedding processes, communication and training, to ensure efficient and effective utilisation of the tool,” said Dominic Hastings, executive consultant at State of Flux.

The study said e-auctions can provide savings in excess of 20 per cent. But 53 per cent of organisations surveyed completed less than five e-auctions in the past year. The report found that organisations that have invested seriously in e-auction programmes undertake more than 1,000 a year.

It also found where e-sourcing tools are used, benefits included improved transparency, an increase in standardised processes and savings. “We recommend a measured approach to implementing e-sourcing with realistic, incremental goals. A cost-effective approach is critical for organisations that are now in their second or third launch of e-sourcing and cannot afford to get it wrong again,” said Alan Day, chairman of State of Flux.

The report surveyed 80 organisations from over 20 different sectors.

☛ To request a copy of the eSourcing Report 2012 please contact Emily Richardson and Dominic Hastings. Or alternatively you can join State of Flux on LinkedIn.

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