State of Flux survey on e-Procurement – more opportunity for buyers and suppliers

Alan Day, State of Flux founder

State of Flux, the procurement consulting firm, recently published the results of their survey into the use of eSourcing technology.  It’s a very interesting report – some surveys just tend to play back the results, but here State of Flux have put commentary and analysis around the basic data, which makes it a worthwhile read.

What is perhaps a little depressing for the procurement profession is the relatively low usage levels of eSourcing  – particularly given that the sample of 80 firms who responded is presumably, if anything, biased towards people who are users.

Despite the benefits, most organisations use eSourcing for less than half of their sourcing requirements. Their key challenges are around the complexity and lack of flexibility of many tools…”

Of course, this can also be looked at as an opportunity for solution providers and a clear indication of how to get better uptake of their products.

Not surprisingly, users who have a longer experience with eSourcing for longer see themselves as more advanced users of it, as do larger firms. But there are signs that opportunities are being missed – in terms of both the coverage of eSourcing across the whole spend picture, and in terms of the wider capabilities of the eSourcing products. As State of Flux put it:

“There is a worrying consensus that eSourcing solutions are seemingly being used as and perceived as an ‘auditable yet expensive email system’. It is clear that whilst a transparent and auditable process is important particularly in the reduction of fraud, a lot of the potential value in the systems is not being harnessed and this is most likely due to the lack of focus on ongoing change management including training after the initial implementation.”

Then we have the lack of penetration of eAuctions – with the reasons being the complexity of the software and lack of expertise.

Approximately 70% of respondents did less than 25 eAuctions over the last 12 months with 28% doing none at all. Given the significant savings attributable to eAuctions this is an area where eSourcing as a service for individual events or a programme would show significant returns.

I might take issue with some of the “best practice tips” provided by State of Flux – smaller providers being more flexible than large is probably true in general, but I wouldn’t make size of the provider my key selection factor. The usability of the solution and its match to your capability requirements are surely more important.

But all in all, well worth a look. To request a copy of the eSourcing Report 2012, please contact Dominic Hastings or Emily Richardson or call +44 (0) 207 842 0600.

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