Global Enabled Supply Chain Series: Strategic e-Sourcing

With analysts casting new e-commerce terms into the limelight every week, those terms can be easily confused. But make no mistake, there is a big difference between e-sourcing and strategic e-sourcing. Here's how the market is trying to close that gap...


Contract management, spend analysis, RFQ building tools, bid analysis and supplier relationship management tools are all there in the marketplace of today. The problem is, however, that it is highly fragmented. Consolidation within the e-sourcing market is imminent. Larger e-procurement and ERP suppliers, recognizing the increased demand for more strategic e-sourcing technologies, such as increased metrics capabilities and non-price bid analysis functionality, will scramble to acquire and partner with these smaller, more targeted companies.


And while building an arsenal of targeted strategic e-sourcing tools will be important for solution providers, they must struggle to keep that package fluid and well integrated. Rietzke, of SAP, explains, "Strategic sourcing is not just a RFP/RFQ engine with an indirect procurement engine underneath it. It has to be holistic.


Indeed, a holistic, integrated approach will be the key to success in the strategic e-sourcing market during the next year, driving a major shakeout for the niche e-sourcing suppliers of today. But for those that survive, the rewards will be great. According to Aberdeen research, the market for strategic e-sourcing solutions will grow from $382 million today to more than $3.3 billion in revenues by 2004, representing a 98 percent compound annual growth rate. No doubt e-sourcing suppliers will be scrambling to get a slice of that market, but it will require getting past semantics, and getting down to real strategy. 

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