Delivering Measurable Results Top Business Objective for Procurement, Survey Finds

Accessing and analyzing spend data also seen critical as companies get serious about spend management; Ariba research identifies 2007 priorities and challenges


Sunnyvale, CA — December 11, 2006 — Delivering measurable results and accessing and analyzing spend data are top of mind among procurement executives as they prepare for 2007, according to a global survey conducted by spend management solution provider Ariba.

Leveraging its global roster of customers, Ariba polled more than 550 procurement professionals representing diverse industries, roles, company sizes and geographic regions to understand their goals for the coming year. For the second consecutive year, delivering measurable results ranked as the number one priority among respondents.

"Companies of all types and sizes clearly view spend management as a strategic initiative and key to their future success," said Hari Candadai, senior solutions marketing manager at Ariba and author of the Ariba report. "Looking ahead to 2007, companies will place increased emphasis on generating real, measurable results that translate to profitability improvements."

Accessing and analyzing spend and building internal commitment also ranked high among the objectives of those surveyed. Ariba will host a Web seminar on Thursday, December 14, with a panel of senior procurement executives from major companies discussing the survey results and their own priorities for 2007. (More information below.)

"Companies that are serious about spend management recognize the importance of understanding what is being purchased from whom and how these purchases align with the organizational goals," Candadai added. "And they are keenly aware of the need to drive awareness at different levels to secure the support, investments and adoption necessary for their initiatives to succeed."

Top Ten Priorities

Among the top ten spend management priorities identified by participants in the Ariba global survey:

1. Delivering measurable results
2. Accessing and analyzing spend data
3. Completing projects on time and within budget
4. Building internal commitment
5. Establishing consistent, efficient processes
6. Defining a spend management strategy
7. Supporting multiple business units / geographies
8. Managing strategic commodities
9. Ensuring compliance with established processes
10. Increasing the effectiveness of supplier relationships

Spend Management Challenges

Over 75 percent of respondents to the Ariba survey were chief executive, vice president, manager or director level and represented companies headquartered in the Americas, Europe, Asia Pacific/India and Middle East/Africa. In addition to outlining their priorities, survey participants also identified the most pressing challenges they will face in driving spend management initiatives in 2007. The number one issue among those polled was expanding the scope and reach of their spend management programs without adding resources.

"Procurement executives are being asked to extend the boundaries of spend management both functionally and geographically to maximize the returns on their procurement and cost initiatives," Candadai noted. "But in most cases, they are not being given additional resources with which to do it. So they must be creative in their approach."

Gaining visibility into spend remains a significant challenge as well, ranking in the top three for the second year in a row.

"Many companies still have data residing in disparate systems, which makes it difficult to gain a clear view into spend on an enterprise-wide basis," Candadai said. "This is compounded by limited analytics capabilities, inaccurate information of spending data and inconsistencies in vendor and product information."

Top Ten Challenges

Among the top ten spend management challenges that respondents to the Ariba survey expect to face in 2007:

1. Extending scope and reach of programs without adding resources
2. Building internal commitment
3. Accessing and analyzing spend data
4. Completing projects faster
5. Supporting multiple business units/geographies
6. Establishing consistent, efficient processes
7. Ensuring user adoption of spend management solutions
8. Identifying opportunities faster
9. Ensuring compliance with established processes
10. Delivering measurable results

"Companies on the path to spend management will encounter road blocks," said Christine Crandell, vice president of marketing at Ariba. "But by focusing on a clear set of priorities that align with their strategic goals and enabling key people, process and technology, they can quickly realize tangible, sustainable results that enhance their bottom line and competitive advantage."

In addition to these findings, the Ariba survey provides insights into the spend management priorities and challenges for 14 different industry sectors, including: automotive, consumer packaged goods, diversified chemicals, diversified manufacturing, financial services, healthcare, high tech, logistics/transportation, oil and gas, pharmaceutical, public sector, retail, telecommunications, utilities and energy.

The full report is available at http://www.ariba.com/go/priorities

A panel of senior procurement executives from leading companies will address the survey results during an interactive Web seminar on Thursday, December 14, 1:00-2:00 p.m. Eastern Time, hosted by Ariba and moderated by Supply & Demand Chain Executive Andrew K. Reese. The panel members will discuss the issues that will most significantly impact spend management, and the priorities and challenges that will drive their initiatives in the year ahead. Online registration for the free Web seminar is available at: https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=32319&sessionid=1&key=ED25F72BFB785233994A6442C05DED5B&sourcepage=register

  • Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required