Benchmarks for eSourcing

February 14th, 2007 at 06:06am David Bush - Iasta

Aberdeen’s recent report broke down responses from over 160 survey respondents. The numbers in the chart represent some findings that best in class companies scored, relative to all others involved. Of interest:

• A clean sweep of 100% had a clear strategic sourcing process which was capable of sourcing 61% of spend strategically. The usage of eSourcing technology is probably a facilitator of this since the technology acts as a catalyst for sourcing process improvement. This is 50% more spend sourced strategically than the rest of the respondents. A higher percentage of spend sourced well means greater savings by default, regardless of method of bid collection.
• 97% of respondents have an active eSourcing framework and application in place.
• Best in class companies that use eSourcing, suffer an average savings leakage of 14% while all others register 24% savings leakage.
• 39% of the time, price is the sole award criteria in BICs while it is actually higher in all others (41.5%). Opponents of eSourcing claim that this is a drawback of using this technology but the data shows that more companies are defaulting to price when they don’t have tools in place. This is likely due to the fact that the information needed for better decision making is spread out and unusable in a timely manner.

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Entry Filed under: Analysts/Research, General, Supply Management Best Practices, Technology / SaaS, e-Sourcing Marketplace