US companies plan to spend more on technology and outsourcing

12 June 2013

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Many US businesses plan to increase spending on procurement-related technologies and outsourcing in 2013, a survey has found.

Xchanging’s Corporate Spending and Procurement Trends – 2013 survey found while 65 per cent of respondents expect to spend more in 2013 than 2012 they are seeking to adopt a more strategic approach to doing so.

Some 33 per cent of respondents said their organisation would increase spending on third-party procurement services or outsourcing in 2013. Nearly half (44 per cent) considered their in-house procurement functions to be understaffed.

Spending on procurement tools is likely to be concentrated on supplier management processes (top priority for 43 per cent) and category management (21 per cent).

When asked what practices or services could benefit the firm in terms of efficiency, savings or competitiveness, 40 per cent of respondents said bringing a greater level of spend under management was the top or second priority.

Only 38 per cent of respondents said procurement was seen as strategic to the business by top-tier management.

Technology to help track savings to the bottom line was seen as top priority by 34 per cent of respondents. Only 14 per cent said their company reached the benchmark of having 85 per cent of indirect spend under centralised management and directly supported by C-suite executives.

“The general consensus from our pool of survey respondents is that, with greater projected spending for 2013, organisations are looking to be more calculated in determining exactly where that money goes and how those investments are creating a return,” said Indy Ghosh, Xchanging’s vice president, head of business development, marketing and advisor relations.

“Sourcing of indirect materials – those non-core to a company’s product or service – is generally an under-addressed spend area, where savings can be derived to hit the P&L directly or used to fund innovation.”

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