The e-sourcing market is rapidly evolving and promises a robust opportunity for both software and service vendors.
According to IDC, combined e-sourcing/supplier management/e-procurement service revenues will increase to 20% of the total supply chain service market in 2004 up from 4% in 1999.
"E-sourcing is emerging as a foundation upon which rests the success of an e-procurement implementation," said Nelly Zaharinov, senior analyst with IDC`s Supply Chain Services research program. "Because of the complexity of procurement business processes, companies are turning to both service providers and software vendors to get a combination of strategic business advice, implementation services, and powerful software tools that enable them to rationalize, automate, and manage the upfront sourcing process."
According to IDC, the major benefits of e-sourcing are its abilities to address the difficulties of strategic sourcing assessment, automate most routine tasks, provide spending and category management visibility and control, maintain sourcing history, and transfer best practices into everyday purchasing operations.
In the near term, IDC expects not only management consulting but also Internet services and e-marketplace services firm offerings to include strategic sourcing analysis and implementation of e-sourcing tools because clients will increasingly realize that to derive maximum value from e-procurement, they need to conduct sourcing analysis.
As the e-sourcing market rapidly evolves, IDC believes both software and services firms should develop joint offerings and go with a single solution to market. "Achieving competitive advantage and market share in the e-sourcing market will require creativity and sound partnerships. E-sourcing tools alone have limited value if not backed up by sourcing and industry expertise of consultants," Zaharinov said.
IDC`s recently published bulletin, A Better Way of Doing Strategic Sourcing: E-sourcing Definition and Related Service Opportunities (IDC #B23725), defines the three major components of the procurement business process strategic sourcing, supplier management, and day-to-day purchasing. Specifically, this bulletin discusses the role of strategic sourcing in the success of an e-procurement project.
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International Data Corporation (IDC)
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