Iasta Announces Release of Benchmark Survey Data for Strategic Sourcing
Findings suggest many improvements can still be made to streamline cost reduction

Indianapolis, IN, March 20, 2006

Iasta.com, Inc., a leading provider of e-Sourcing tools for the Global 3000, today announced that it had released the findings of its recent e-Sourcing Benchmark Diagnostic Survey. This information was collected over a three month period in Q4 of 2005 and included almost fifty detailed questions that were asked of supply chain and purchasing professionals. The focus of the study was to determine industry vertical and general benchmarks regarding the implementation of strategic sourcing best practices and implementation of e-Sourcing tools.

Specifically, some of the following conclusions were drawn, in regards to e-Sourcing adoption and market conditions:

Conclusion 1 - Stages of e-Sourcing Lifecycle: There are different evolutionary stages of the strategic e-Sourcing lifecycle. A company's size is the greatest predictor of where it appears on the lifecycle.

Conclusion 2 - e-Sourcing tools = reverse auctions: Many companies - Large, Medium and Small - wrongly assume that e-Sourcing means reverse auctions. By making this assumption, these companies decide not to use ANY e-Sourcing tool.

Conclusion 3 - Standardized Sourcing Operating Procedures (OPs): Companies that used e-Sourcing tools generally have standard OPs. Companies that do not use e-Sourcing tools generally do not have standard OPs.

Conclusion 4 - Continued reluctance to run reverse auctions: Though reverse auctions have been around for many years, many companies still do not utilize it - especially Small and Medium sized companies. Though large companies run more auctions than small and medium ones, there still exist opportunities run reverse auctions.

Melissa Beuc, Senior Director of Marketing and Product Development of Iasta, and a leader of the team that developed and administered the benchmark commented, "There is very clear data that shows companies are making steps towards effective strategic sourcing but there is still much to be done. In particular, both e-Sourcing adopters and non-adopters can make some very significant and cost effective changes to impact the sourcing lifecycle and drive cost savings."

In addition, there were a number of interesting statistics which were collecting from the survey results:

• Only 47% of companies have done a formal Spend Analysis exercise in the last 3 years. Companies over $5b in sales are three times more likely to have done this than companies under $1b in sales.
• Only 46% of companies under $1b in sales have a sourcing automation tool for generating and analyzing bid packages.
• Only 17% of companies use e-Sourcing tools for optimization/decision analysis. However, 81% of respondents said they have complex award decisions that would be benefited from an optimization tool.
• Overall, over 50% of companies have no contract management capabilities.
• 70% of responding companies have sponsored reverse auctions with up to 89% of companies over $5b in sales. Over 50% of companies over $1b have executed e-auctions and 78% of large companies actively use auctions on a consistent basis.
• 63% of respondents felt price was the primary reason for switching suppliers, over three times the next highest response.
• Over 70% of companies felt that they had a range of 5-25% of spend too strategic to competitively source. However, of the responding companies, only 5% are using reverse auctions consistently.

For more information to the data analysis or a copy of the report, please contact Iasta directly or email survey@iasta.com. Iasta plans to continue data collection over the course of calendar year 2006 and update its findings at the conclusion of the period.

About Iasta

Based in Indianapolis, Iasta is a leading global provider of sourcing software and service solutions. As a significant provider of e-Sourcing applications and services, Iasta has amassed an impressive client list of more than 60 companies, most of which are within the Fortune 1000. Through its unique combination of industry-leading web-based software, in-depth supply market information, and implementation of sourcing best practices for supply chain management, Iasta has helped customers' source goods and services with an average cost reduction of 17 percent, in addition to significant reductions in sourcing cycle times. For more information about Iasta, please visit www.iasta.com or call 317.594.8600. For more information regarding the Iasta blog, which covers events and issues in the e-Sourcing industry, please visit www.esourcingforum.com.

Iasta is a trademark of Iasta.com, Inc. All other products and brand names are trademarks or registered trademarks of their respective owners.

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