The Votes Are In

Forrester, NAPM release report on online buying

January 24, 2001 -- NAPM (The National Association of Purchasing Management) and Forrester Research Inc. have released the NAPM/Forrester Research Report On eBusiness, which tracks online activity for both manufacturing and non-manufacturing organizations. The report shows that companies are still in the early stages of Internet adoption, with firms just beginning to buy online and use the Internet for other parts of their procurement processes.

NAPM and Forrester will be providing high-quality data that charts the progression of B2B e-commerce for our members and the business community with this quarterly report, said Edith Kelly-Green, NAPM chair of the NAPM/Forrester Research Report On eBusiness and vice president, Strategic Sourcing and Supply for Federal Express. By doing so we can provide valuable information on online activities to business leaders, particularly those in the supply management function.

There's a significant incoming wave of online B2B activities. Almost half of the corporate purchasers surveyed report being in the earliest stage of adopting the Net. At the same time, an overwhelming number of these respondents see the Net as an important part of their plans, said Bruce D. Temkin, group director at Forrester. With this report, we'll be able to provide an ongoing tracking mechanism for this upcoming e-business surge.

The Report On eBusiness also revealed that during the past three months, 61 percent of organizations have bought indirect materials online and nearly 40 percent of manufacturers have purchased direct materials online. More than 15 percent of companies did some purchasing via an online auction, with manufacturers having used them more than twice as often as non-manufacturers.

Relationships with suppliers are changing. While organizations aren't yet buying a large portion of their goods online, there's significant momentum to use the Net for things like identifying new suppliers and collaborating with suppliers. But suppliers have a lot of work to do. For every purchaser that was pleased with the online capabilities of their suppliers, four others felt that these offerings weren't very good, added Temkin.

Comments made by respondents such as deciding on appropriate initiative,' problems with implementation,' resistance to change,' and funding,' point out some of the issues facing organizations in implementing or deciding upon an e-business solution, added Kelly-Green.

For the Report On eBusiness, NAPM and Forrester Research received survey replies from 368 purchasing executives from both manufacturing and non-manufacturing organizations. The median purchasing volume for the respondents was $75 million. To compare the adoption of different activities and to track the adoption of activities over time, NAPM and Forrester created the eBusiness Adoption Momentum index (eBAM).

The NAPM/Forrester Research Report On eBusiness, developed in fall 2000, measures the adoption of Internet-based procurement. NAPM and Forrester Research developed the survey jointly and will issue the report every three months in a manner similar to the monthly NAPM Report On Business.