E-procurement message is failing to hit the target

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E-procurement message is failing to hit the target

The uptake of e-procurement and use of marketplaces among large blue chip companies has failed to take off at the speed predicted a few years ago, research from Ariba has shown.

Of the 200 cross-sector blue chip companies interviewed by Ariba, only 25 per cent viewed e-procurement as a key strategic priority. Of those already using e-procurement, over 70 per cent were only seeing cost savings of up to five per cent of total spend.

The survey also had bleak findings for the development of marketplaces — just 20 per cent of respondents already belonged to a Web-based trading exchange and only eight per cent planned to join one.

John Watton, UK marketing director at Ariba, said the main factors slowing adoption of e-procurement systems and marketplaces were connected to systems integration.

“The biggest challenge for a lot of companies is business process re-engineering and integration of e-procurement into back-office systems,” he said.

Michael Templeman, UK managing director of Elcom, suggested the slow adoption of e-procurement and marketplaces might be connected to the negative impact of the downturn in technology stocks and dot com failures.

He believed e-procurement uptake rates would double over the next two years, adding that the right people within target buyer companies needed to be reached.

“Rather than emphasising the ‘e’ part of this, I’d say we build the tools to make purchasing within a company more efficient. I’d also emphasise the business message and reach the financial director rather than the managing director or IT director,” he said.


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This was first published in March 2001

 

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