Iasta's Sourcing Benchmark Findings

I've been enjoying keeping up with E-Sourcing Forum in the past couple of days, as Iasta publishes the highlights from its E-Sourcing benchmark via RSS. You can read the first, second, and third days of coverage by clicking the above links. In no particular order, here are some of the highlights that I've found particularly insightful (even if they're not a complete surprise):

The study found that 88% of companies with over $5 billion in revenue have standard sourcing processes and procedures. Yet, this number drops to less than 25% in small and middle market companies of less than $1 billion in revenue. Given the lack of established sourcing processes in smaller companies (not to mention lower than average reverse auction usage), it seems to me that one of the best opportunities for Spend Management providers in this segment would be to offer solutions that provide equal parts process and unit cost savings to create a combination of sustainable and immediate results.

Here are some additional findings from the study: "Though 63% of companies responded that PRICE was the primary reason to switch suppliers, only 5-25% of companies actually switch suppliers ... A large number of respondents (70%) indicated that only 25% of spend was too strategic to source. Yet despite the availability of spend, only 5% of spend is sourced via reverse auctions. Though incumbent suppliers may lower prices during negotiations, far more savings may be left on the table from potential suppliers.

"Key success factors for e-Sourcing: 1: Visible, vocal leadership with a plan; 2: Long-term commitment to strategic e-Sourcing; 3: Use of commercially available e-Sourcing tools/application; 4: Use of standardized operating procedures that evolve with business needs; 5: Commitment to team through training and new skill acquisition."

Jason Busch

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