The Advanced Sourcing & Negotiation Benchmark Report
Executive Summary
In retrospect, the initial e-sourcing waves that began a decade ago resembled a corporate “crash diet,” leaving an immediate and noticeable impact on the enterprise, but also a daunting challenge to develop a new and different program that could sustain these benefits and keep the “weight” off. As the use of basic sourcing strategies has reached saturation levels with certain categories, enterprises must utilize advanced sourcing strategies across a wider range of categories to deliver the same results.
Key Business Value Findings
Enterprises that employ advanced sourcing strategies are positively impacting product development cycles and building stronger supplier relationships by making better, moreinformed decisions. They are also driving innovation and to be certain, they are saving more money than their competitors.
On average, the enterprises participating in this benchmark report:
Identify savings of 11.9% per sourcing event
Realize savings of 9.4% per sourcing event (savings that are actually implemented and “realized”)
Utilize a formal strategic sourcing process on 43% of their total spend
Utilize e-sourcing across 20% of their total spend
Employ advanced sourcing strategies on 15 to 40% of their sourcing initiatives
Considering the benefits seen by the average e-sourcing program, it is surprising that a full 36% of this benchmark’s respondents (and 20% of all large enterprises) fail to utilize any level of e-sourcing.
Implications and Analysis
Best in Class enterprises use formal strategic sourcing and e-sourcing processes to drive greater e-sourcing throughput, achieve higher than average savings, and provide greater value to the enterprise. They are 32% more likely to employ advanced sourcing strategies and proclaim a 54% edge in their proficiency. Their superior performance is perhaps best exemplified by having realized savings results that are 39% better than their competitors.
