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Friday, August 22, 2014

Not Enough Organizations Leverage E-Commerce, Supplier Networks

Do not underestimate the value of e-commerce when it comes to revenue enhancement. Aberdeen Group, in Boston, forecasts that e-commerce can be a major source of revenue next year for chief procurement officers (CPOs). Companies that embrace it “stand to gain tremendous savings,” according to a recent Analyst Insight released by the research firm.

The report, based on data gathered this year and last, notes that the ubiquity of web-connected businesses and mobile devices permits companies to maintain real-time awareness of supply needs and product availability and to order on a global scale. With growth also seen in related e-commerce areas such as invoice management and spend analysis, CPOs who fully exploit e-commerce will significantly reduce the time it takes to accomplish vital activities, increase transparency and decision-making speed, and better align business needs with strategic goals.

Credit: arztsamui at

Credit: arztsamui at

Aberdeen sees considerable growth in supplier portals and networks in 2014, which will facilitate e-commerce. The report notes that best-in-class companies represented in a survey this year significantly outperform the “laggards” in taking advantage of e-commerce opportunities.

RELATED: Supply Visibility, Rapid Data Gathering Propel Profits

When it comes to e-auctions, for example, 60 percent of best-in-class companies participate compared with 25 percent of laggards. In accessing supplier portals and networks, 53 percent of best-in-class respondents do so regularly versus only 38 percent of laggards. The same numbers appear when applying e-commerce to purchasing and invoice management.

Contract repository is handled electronically by just under half of the best-in-class companies (47 percent), but by only one-quarter of laggards. Moreover, spend analysis is monitored as part of e-commerce by just 40 percent of best-in-class companies and by 25 percent of laggards. This is surprising for best-in-class respondents, considering the potential that spend analysis has in developing benchmarks for further savings.

Nevertheless, based on Aberdeen’s findings, companies that take advantage of the opportunities that e-commerce provides for — efficiency, economy, and transparency — can expect major operational benefits in 2014.


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