IT biggest area of indirect spend for buyers, survey finds

posted by Marino Donati
23 June 2015

IT-related services is the biggest area for indirect procurement spend, according to a survey.

The ProcureCon Indirect 2015 Benchmarking Report highlighted the biggest challenges and opportunities facing senior procurement professionals, the areas where their budget is spent, and their views on the future of indirect procurement.

It showed 79 per cent of respondents spend most of their indirect budget on IT-related services. This was followed by professional services, such as consultants and advisers, on 64.8 per cent, and facilities management and office services with 60.4 per cent.

Capital goods, professional services and IT services were the top three fastest growing indirect spend categories, the survey revealed.

According to the survey, 57 per cent of respondents operate in procurement organisations managing more than €500 million, while 40 per cent of respondents spend over €1 billion on procurement. A quarter of respondents said they spent between 21 per cent and 30 per cent on indirect procurement.

Of those surveyed, 76 per cent have separate direct and indirect procurement teams, while 48 per cent have less than 10 people in their indirect procurement team.

Although the vast majority of the 91 respondents scored their procurement competency in all categories as medium, between 35 per cent and 45 per cent felt they were highly competent in category management, stakeholder management and supplier management.

Value delivery was the top priority for 47 per cent of respondents followed closely by cost leadership. Talent, normally a top priority especially for senior procurement leaders, scored only as a medium for some and was a low priority for many while operational efficiency scored highly as a medium priority.

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