eSourcing - Where are you and what should you do?
Add comment March 26th, 2007 David Bush - Iasta
A number of weeks back, I spent a series of days covering some of the important aspects of the Aberdeen Advanced Sourcing Negotiation Benchmark. In this final installment, I wanted to relay some of the recommendations that Aberdeen proposes. The complete benchmark will be available, free, on the Iasta web site very soon.
One table I found interesting was the KPIs of eSourcing which allow respondents to rate themselves on a number of factors related to usage of eSourcing.
| Performance Area Average | Result |
| Formal sourcing processes established | 72% |
| % of spend that is strategically sourced | 43.4% |
| E-sourcing application in current use | 64% |
| % of spend that is e-sourced | 20.0% |
| Average identified savings (per event) | 11.9% |
| Average realized savings (per event) | 9.4% |
| % of e-sourcing events using price as sole award criteria | 40.2% |
| Advanced sourcing proficiency (self-rating on scale to 100%) | 36% |
Recommendations:
- Develop, augment or outsource process, category, supply market, and technology expertise.
- Establish centers of excellence for sustainable proficiency.
- Employ advanced sourcing strategies across a wider set of categories. Look at complex categories, including services, logistics, T&E, and direct/strategic materials.
- Focus on realized savings and correlate them to enterprise-level financial metrics (e.g., EPS).
I really like how Andrew broke down the recommendations based on where your company is relative to its peers. Aberdeen gives very solid advice for three categories of laggard, industry average and best in class. All of these are consistent with what we see in companies and maturity in sourcing process and advanced techniques.
Entry Filed under: Analysts/Research, General, Supply Management Best Practices, Technology, e-Sourcing Marketplace
