Survey: eProcurement winning over eMarketplaces

Survey: eProcurement winning over eMarketplaces

According to research of Com Tech's customer base at its recent annual forum, companies are three times more likely to become involved in electronic procurement than join business-to-business (B2B) exchanges or eMarketplaces.

While the figures themselves would have to be considered somewhat skewed toward higher adoption rates than the total market (as the respondents are likely to be reasonably Internet-focused if attending the forum), the results indicate the B2B exchange phenomena is still far from maturity.

Over 70 per cent of Com Tech's customers indicated they were currently involved in, or considering a move into, electronic procurement. The primary reasons for such involvement were a reduction in administration costs (86 per cent), a way of enforcing purchasing compliance within the organisation (56 per cent) and a way of leveraging better discounts from suppliers (54 per cent).

"The value in electronic procurement is in reducing administrative and processing costs considerably," said Lloyd Vogelman, CEO of MarketNet, Com Tech's B2B division. "It structures the buying process by reducing maverick buying - when someone at a company buys from a supplier who didn't offer the right price, but offered convenience at a particular time. It also improves reporting processes so you can get into fact-based negotiations."

These figures were well above similar responses for involvement in B2B eMarketplaces. Only 10 per cent of respondents currently use an eMarket-place and only 17 per cent expect to join one in the next 12 months.

"The reservations about eMarket-places stem from the fact that a lot of what is procured out there in the market is services related," said Vogelman. "It is not just about price, but service capability and delivery."

About half of the respondents indicated they have a clearly defined B2B strategy, with 22 per cent developing it in-house and 27 per cent using external consultants.

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