04/06/01 -- eSourcing Savings to Top $1.7 Trillion, Report Shows

From Wire Reports

eSourcing could save businesses more than $1.7 trillion on a global basis, according to a new report from Aberdeen Group (www.Aberdeen.com).

In addition, Aberdeen finds that applying Internet-based technologies to strategic sourcing activities can shorten process cycles, lower administration costs, and speed time-to-market for new products.

"Strategic sourcing provides the single largest opportunity for companies to reduce costs and design optimal supply chain structures," said Tim Minahan, the editor of the report and director of supply-chain management research for Aberdeen.

"With the unstable economic environment forcing companies to control costs, Aberdeen foresees significant demand for eSourcing technologies and services. We anticipate that the eSourcing market will top $3.3 billion in revenues by 2004,” he said.

Strategic eSourcing describes the process of utilizing web-based technologies to support the identification, evaluation, negotiation and configuration of products, suppliers and services into a supply-chain network that can efficiently respond to changing market demands.

Aberdeen's research finds that eSourcing can not only help buyers identify and negotiate with a broad range of qualified suppliers, but reduce process costs for sourcing engagements by shortening sourcing cycles by 25 percent to 30 percent. Additionally, it can reduce time-to-market cycles by 10 percent to 15 percent.