Aberdeen Group Study Finds E-Procurement Driving Higher Compliance and Savings at Lower Cost

Red Bank, NJ

January 19, 2005. Advances in application usability, category specific functions, and supplier enablement solutions have yielded dramatic improvements in time-to-value for e-procurement deployments, according to a new Aberdeen Group report. According to the study, enterprises today use e-procurement to manage more requisitions, spend categories, and suppliers than ever before.

The third in a series of Aberdeen benchmarks of e-procurement performance since 1998, “The E-procurement Benchmark Report,” found that this year’s 150 e-procurement benchmark participants outperformed Aberdeen’s 2001 and 1998 benchmarks in total spending managed via e-procurement, suppliers enabled, user adoption, and reduction in unapproved spending.

On average, enterprises participating in the 2004 benchmark:

• Reduced off-contract spending by 64%
• Reduced prices by 7.3% for spend brought back onto contract
• Improved spend under management of procurement group by 20%.

“Once considered the poster child for the dot com bust, e-procurement is quietly delivering measurable value to enterprises – at a much lower cost,” said Tim Minahan, Aberdeen’s senior vice president, supply chain research and author of the report. “Enterprises looking to improve spend compliance and control should give e-procurement a second look. Likewise, early adopters should invest to reinvigorate or extend underperforming initiatives.”

The Aberdeen report demonstrates that companies reaping the greatest benefit from e-procurement employ the following strategies:

• Elevated e-procurement from a tactical transaction management activity to a strategic source-to-pay initiative for driving compliance
• Secured senior executives support and policy changes to drive system adoption and compliance
• Shifted supplier enablement and catalog management tasks to supplier networks or catalogs hubs managed by e-procurement vendors or another third party
• Clearly defined reinforced cost, processes, and performance metrics for measuring e-procurement success

“The E-procurement Benchmark Report” arms readers with actionable frameworks to benchmark their e-procurement programs against industry average and best-in-class performers. The study also details average selling prices, functional enhancements, supplier enablement strategies, and delivery models of e-procurement applications. Readers will be presented with improvement recommendations based on their current level of e-procurement maturity.

About PurchasingNet, Inc.

PurchasingNet, Inc. is a leading provider of Web-based eProcurement and ePayables software to mid- and large-sized companies. The company has over 1,400 customers in Financial Services, Retail/Consumer Products, Professional Services, Media/Publishing and a variety of other industries.

Founded in 1983, PurchasingNet has focused exclusively on the development and implementation of Procurement and Payables applications since inception. In addition to building an extensive, blue-chip client base, PurchasingNet possesses deep domain expertise in Purchasing and Payables business processes. The average length of service at PurchasingNet is 8 years per employee.

PurchasingNet’s customers include Countrywide Financial, US Bank, Navy Federal Credit Union, American Financial Group, Liz Claiborne, HBO, EarthLink, Black & Decker, Kroger, and General Mills.

For Details, Contact:

Erinn Tarpey
Marketing Manager
PurchasingNet, Inc.
732-212-1500 x 3173