PRINCETON, N.J. September 15, 2011 - Zycus, a world leader in Procurement Technology Solutions, has released results of an in-depth study into which tactics and technology combinations work best for convincing employees to adopt and embrace procurement-led corporate performance initiatives. Nearly 600 procurement professionals - representing an estimated $370 billion in collective spending power - participated in the study. The report contains both industry average and tiered performance benchmarks for the following indicators: compliance to enterprise supply contracts and preferred procure-to-pay (P2P) processes, stakeholder participation rates in strategic sourcing and supplier performance management activities, procurement technology adoption and use (broken out by procurement technology category), and procurement technology utilization (as % of total available functionality). Key conclusions from the study:
- Companies achieving the highest internal compliance rates to enterprise supply contracts and preferred procure-to-pay (P2P) processes employ a combination of policy, persuasion (business case/communication), performance objectives, metrics, monitoring, compliance reporting, and ease-of-use tactics. Contract Management, Spend Analysis, and eProcurement solutions appear to be the most powerful enablers of these compliance tactics. Adopting an integrated suite of solutions pushes the positive performance gap between best of class and laggards to as much as 40 points.
- Procurement organizations that win high levels of stakeholder participation in strategic sourcing and supplier performance management activities achieve compliance rates three to four times greater than those that neglect to engage internal stakeholders. Effective tactics for winning stakeholder engagement include: persuasion (business case), clear and effective communication, stakeholder input into decision making, ease of participation, and consistent execution of standard and transparent, fact-driven processes. Top three technology enablers for these tactics are: Spend Analysis, eSourcing and Supplier Performance Management.
- Organizations implementing procurement technology but failing to achieve high adoption, and utilization of their solutions show substantially (50-75%) lower performance for compliance and stakeholder engagement compared to companies that obtain high adoption and utilization. winning the highest technology adoption and usage rates employ a combination of compulsory tactics -policy, usage monitoring, reporting, workflow management - along with ease of use (as a key solution-selection criteria), training, and ongoing mentoring.
- In spite of procurement technology adoption and use playing a big role in winning corporate cultural acceptance for procurement-led performance initiatives, few believe their organizations fully utilize the technology already available to them. - We often hear from our customers that winning genuine adoption and support from internal customers and stakeholders is the greatest challenge for procurement leaders looking to drive corporate performance improvement using procurement levers, remarks Anurag Dixit, Vice President of Marketing for Zycus. - Our study - which garnered a remarkable participation rate - provides valuable insight into how leading procurement organizations gain acceptance and support from complex corporate populations. There are no easy answers in the results, but we expect this report to help procurement leaders focus on the most effective tactics and technology investments.
Manager - Public Relations & Analyst Relations, Zycus Inc.
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