Forrester study on spend management

December 21st, 2006 at 06:24am David Bush - Iasta

I scanned the recent report issued by Forrester titled: The Spend Management Market — How Big, Where Is It Growing, Who Are the Market Leaders. The presentation file is available here. Some of the findings that I thought were interesting included:

• e-Procurement and e-Sourcing usage is the strongest with 7700 and 2900 adopters, respectively
• In the same category, Spend Analysis lags well behind with only 400 adopters (amazing)
• Since 2001, the number of vendors providing sourcing and procurement solutions has decreased by 33%
• Forrester recommends working with BoBs and feels that ERP vendors still have large holes in their offerings
• The market for solutions is not saturated and growth is expected
• In North America, 36% of Global 2000 equivalent companies do not use any procurement or sourcing software solutions
• SaaS demand is strong in e-Sourcing, EIPP, and Spend Analysis but weak for contract management and e-Procurement

In it, Forrester recommends seperating the decision between sourcing and contract management applications. I feel this comes down to what you need, though. Some CLM tools, like I-Many, are extremely comprehensive and do have stand-alone value. However, it is not necessarily the best thing to make this decision in a silo mentality, as the functionality is very inter-related between these areas and many sourcing apps support contract management functionality.

Also, I found many of the slides difficult to discern information from, as the survey questions merged procurement and sourcing solutions into a super-category. This made it much harder for me to get value out of the trends and percentages that were discussed.

Many of the Forrester Wave reports will be updated in early 2007. However, it will probably be another 8 months until the e-Sourcing Wave is done again.

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Entry Filed under: Analysts/Research, General, Technology, e-Sourcing Marketplace