E-Sourcing Results — Tales from the European Trenches

Tim Minahan recently offered a guest post on Procurement Leaders blog suggesting that not all European companies lag North American leaders when it comes to e-sourcing adoption and results. According to Tim, "e-sourcing (including online auctions) is fast becoming standard operating procedure on the Continent." The case of Spain's largest telecommunications provider, Telefonica, highlights the extent to which early adopters in Europe have made e-sourcing standard business practice.

Tim notes that, "over the past year, Telefonica ran more than 35,000 e-sourcing projects for nearly €17 billion in goods and services -- a more than 1,500% volume increase since 2003, the first full year of the e-sourcing program. And the telecommunications giant is far from finished. Dominguez is pressing his team to hit a run rate of 70,000 e-sourcing projects per year -- a third of which will involve e-auctions." In addition, Telefonica has succeeded in "cutting sourcing times in half, reducing management cost per awarded amount by more than 27%, and increasing the amount of spend managed per FTE by more than 85%." All of these metrics should be music to ears to those fighting e-sourcing and reverse auction curmudgeons inside their organizations -- regardless of whether they are doing it in English, Spanish, German, French or any other European language. After all, the language of savings is universal!

- Jason Busch

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