Business transformation needs technology

March 10th, 2008 at 07:30am David Bush - Iasta

Occasionally, it can be difficult to see the forest through the trees, especially as economic pressure is stripping away extra budgets. Supply Chain Brain published findings by AMR last month that advised the opposite.

“Companies that have invested in sourcing and procurement technologies did so to improve operational performance and align with CEO objectives, according to AMR Research analysis in Global Logistics & Supply Chain Strategies magazine’s 2008 Resource Guide & Executive Yearbook.

Improving operational performance is vital for organizations striving to grow top-line revenue and reduce overall costs. This requires CEOs and their organizations to execute in the present and innovate for the future. Doing so means the CPO initiatives must become imperatives.”

Of the four CPO imperatives identified:

• Ensure reliable supply
• Mitigate risk
• Improve working capital
• Reduce and contain the costs of goods and services. Spend analytics, e-negotiations, e-procurement workflow, expense management, and catalogs help reduce and contain the costs of good and services.

The article goes on to forecast the technology industry for these tools by claiming:

All imperatives are driving sourcing and procurement technology investment and in turn the market, which AMR predicts will grow from $2.4bn in 2006 to $3.5bn in 2011. Buyers are calling for a transformation from traditional, localized sourcing and procurement practices to demand-driven and efficient ecosystems that exist in a global economy.

It is a tough road but one well worth traveling.

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Entry Filed under: Analysts/Research, General, Supply Management Best Practices, Technology