Aberdeen Group Study Warns That Tactical Cost Benefits of E-Sourcing Could Be Short Lived.Business/Technology Editors BOSTON--(BUSINESS WIRE)--Sept. 24, 2002 Report examines e-sourcing experiences and strategies in U.S. and EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ; assesses 40 solutions; projects global market to top $3 billion by 2005. Aberdeen Group Aberdeen Group is a provider of business-related research services. It has its headquarters in Boston, Massachusetts and belongs to the Harte-Hanks group. Founded in 1988, Aberdeen's research is used by over 2. , a leading IT market analysis and positioning services firm, released an extensive report on the strategic sourcing market entitled "Making E-sourcing Strategic: From Tactical Technology to Core Business Strategy." The report is based on a study of end user experiences in the U.S. and Europe and evaluations of 40 e-sourcing solution providers. Aberdeen Group projects that the market for sourcing management technologies will grow from $820 million in 2001 to approximately $3.1 billion by 2005, representing a compound annual growth rate of 39.8%. Enterprises and solutions have matured dramatically since Aberdeen examined the e-sourcing market in 2001. Early adopters have moved beyond the "land of pilots" to make e-sourcing technologies a core component of their overall strategic sourcing initiatives. However, most enterprises continue to focus on near-term tactical, cost savings. Aberdeen warns that this myopic my·o·pi·a n. 1. A visual defect in which distant objects appear blurred because their images are focused in front of the retina rather than on it; nearsightedness. Also called short sight. 2. focus on cost reductions could limit the potential impact of e-sourcing. "Facing an unstable economic environment, enterprises have been allured by e-sourcing ability to rapidly deliver significant cost savings and return on investment (ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). )," says Tim Minahan, vice president of supply chain management research. "This siren song siren song n. An enticing plea or appeal, especially one that is deceptively alluring. Noun 1. siren song - the enticing appeal of something alluring but potentially dangerous; "he succumbed to the siren call of the of quick return on investment (ROI) has drive demand for tactical e-sourcing capabilities, including RFx and reverse auctions. However, to sustain savings and drive continuous improvements, enterprises will need to adopt functionality that supports sourcing collaboration, knowledge and project management, and advanced analysis to drive common and repeatable sourcing processes across the enterprise." The report examines the selection criteria, deployment strategies, experiences, and future plans of e-sourcing users across multiple industry sectors in the U.S. and EMEA markets. Key benefits recognized by early adopters include: - Negotiate a 14.3% reduction in goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. costs, on average - Cut sourcing cycles in half - Reduce sourcing administration costs by nearly 60% - Shorten time-to-market cycles by 10% to 15% Users also reported that e-sourcing enhanced their ability to standardize stan·dard·ize v. 1. To cause to conform to a standard. 2. To evaluate by comparing with a standard. sourcing practices, negotiate with foreign suppliers, extend strategic sourcing to a broader range of spending, enhance product quality, strengthen supplier relationships, enhance sourcing expertise and skills, improve supply market knowledge, and elevate el·e·vate tr.v. ele·vat·ed, ele·vat·ing, ele·vates 1. To move (something) to a higher place or position from a lower one; lift. 2. To increase the amplitude, intensity, or volume of. 3. the perception of the procurement function within the enterprise. Despite such benefits, Aberdeen research uncovered flaws with early e-sourcing strategies. Specifically, while e-sourcing technologies have proven effective at enabling enterprises to negotiate significant cost savings, 60% of e-sourcing users indicate that they have not been able to fully recognize these savings on the bottom line. Additionally, the percentage of savings achieved through online negotiations will inevitably decrease over time. As a result, enterprises will be forced to turn to more advanced sourcing processes that can improve visibility into spending, enhance market intelligence, standardize processes, and capture innovation in the supply base. The report provides strategies for solution evaluation and deployment and examines future trends in e-sourcing solution functionality and structure. The report includes Aberdeen's market growth projections by geography and company size. The report also includes evaluations and profiles of 40 providers of e-sourcing technologies and services. The full report is available at www.aberdeen.com or (800) 577-7891. About Aberdeen Founded in 1998, Aberdeen Group is a leading IT market analysis and positioning services firm that helps Information Technology vendors establish leadership in emerging markets. The firm provides IT market intelligence, positioning, and market acceleration services See Web page acceleration. to established and start-up technology companies. Aberdeen's consultants provide up-to-the-minute global IT market insights in more than 25 IT market segments. Research practices focus on emerging market opportunities, market growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , important industry trends, and customer buying patterns. The firm also helps clients to identify new market opportunities, enter those markets successfully, and accelerate the adoption of new technologies. Headquartered in Boston, Massachusetts “Boston” redirects here. For other uses, see Boston (disambiguation). Boston is the capital and most populous city of Massachusetts.[3] The largest city in New England, Boston is considered the unofficial economic and cultural center of the entire New , Aberdeen has research and consulting divisions in Palo Alto, California “Palo Alto” redirects here. For other uses, see Palo Alto (disambiguation). Palo Alto (IPA: /ˌpæloʊˈʔæltoʊ/, from Spanish: palo: "stick" and alto: "high", i.e. ; Fort Collins, Colorado The City of Fort Collins, a home rule municipality situated on the Cache la Poudre River along the Colorado Front Range, is the county seat and most populous city in Larimer County, Colorado. ; and Amsterdam, the Netherlands. Aberdeen is accessible via the Web at www.aberdeen.com. |
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