Executive Summary

e-Sourcing refers to the adoption and use of sourcing automation tools (software) to facilitate the collection, distribution, allocation and analysis of information between buying organizations and supplier organizations.

In 2005 Iasta, a strategic e-Sourcing product and service provider, began a benchmarking survey to capture information about strategic purchasing, the use of e-Sourcing tools, and the adoption of best practice procedures. The study's goal was to help Iasta understand the differences, if any, between industry segments, business practices and e-Sourcing tool utilization. Throughout this report, companies with annual revenues of less than $1 billion (<$1B) are referred to as "Small," companies with revenues between $1 and $5 billion ($1-$5B) are referred to as "Medium," and companies with revenues over $5 billion (>$5B) are referred to as "Large."

The e-Sourcing Benchmark Survey provided interesting insight into the adoption of e-Sourcing tools. After analyzing the results, Iasta determined that there are four key conclusions:

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 to run reverse auctions.

If you are interested in the complete e-Sourcing Benchmark Survey, please select this link, Iasta e-Sourcing Benchmark Survey.