E-sourcing gains in popularity as a procurement tool

Among the multiple systems companies throughout the world use to procure products, e-sourcing showed the sharpest gains as an area where companies are making technology investments, Zycus says in a new study.

Paul Demery

Companies worldwide are increasing their use of Internet-based technology systems to find the best suppliers, products and prices, according to a new report from Zycus Inc., a provider of e-procurement and related software. And among those systems, e-sourcing—the use of Internet-based portals and software applications to find and receive bids from product suppliers—is showing the sharpest increase in popularity, Zycus says.

“Looking at investment interest by major procurement technology category, e-sourcing shows the largest increase from 2012 with the percentage [of companies] already using the technology or planning to invest” in it, Zycus says in the report, “Pulse of Procurement 2014.” The report was based on a January survey of more than 300 procurement executives and professionals worldwide, at companies ranging in annual revenue from less than $500 million to more than $5 billion.

The report notes that 76% of respondents in January 2014 were either already using e-sourcing or planning to deploy it “soon,” up from 65% in 2012. The report doesn’t clarify how soon companies plan to deploy new e-sourcing systems.

But there are still many companies that have no plans to implement e-sourcing or other complementary systems used in the overall process of managing the procurement of products, the report says. More than a fifth of respondents, in fact, say they have no plans to deploy e-sourcing, procure-to-pay or procurement management systems. Procure-to-pay, or P2P, is a system for viewing records of the multiple processes used to initiate procurement of products and make final payments to suppliers. Procurement management systems are used to manage supplier contacts and document the overall costs of procuring products and comparing those costs with a company’s budgeted expenditures.

The report cites the most widely used systems as spend analysis, which is used to ensure accuracy in product pricing and payment data and compliance with spending plans; and contract management, which monitors supplier performance and is used to check that contracts are handled according to terms agreed to by buyers and sellers.

Following are the percentages of companies that already have the listed application, plan to invest soon in it, and who have no plans to invest in it, according to the Zycus report:

● Spend analysis, 69%, 22%, 9%

● Contract management, 64%, 25%, 11%

● Procure-to-pay (P2P), 53%, 26%, 21%

● E-Sourcing, 51%, 25%, 24%

● Supplier management, 46%, 32%, 22%

● Procurement management, 45%, 33%, 22%


B2B, Contract management, E-procurement, e-sourcing, insiteb2bapril22, procure-to-pay, Procurement, Pulse of Procurement 2014, Spend analysis, suppliers, Zycus