Zycus Releases Preliminary Findings from the 2011 Procurement Automation Adoption Survey

PRINCETON, N.J. June 9, 2011 – Zycus, a world leader in Spend Management Solutions, is preparing to release the results of a study aimed at identifying which tactics work best and which are less effective when it comes to persuading people in complex corporate enterprises to:

• Comply with strategic supply contracts
• Collaborate actively in strategic sourcing and spend management initiatives
• Provide feedback on supplier performance
• Adopt and actively use preferred spending processes and technologies

Nearly 600 procurement and supply management professionals – representing an estimated $370 billion or more worth of collective spending power- participated in the study. A few early observations to come out of the analysis:

• Companies that win high participation rates in cross-functional spend management and strategic sourcing processes achieve contract compliance rates that are 3.1 times greater than companies with poor cross-functional participation.
• Companies that win high participation rates in supplier performance management (SPM) endeavors achieve contract compliance rates that are 3.6 times higher than companies with poor SPM participation rates.
• Companies falling into the top (30%+) performance tier for cost savings attributable to spend management report contract compliance rates that are two times greater than companies falling into the bottom (<5%) cost savings tier. The implication: doubling contract compliance may be associated, over time, with a six-fold increase in cost savings realized from spend management activities.
• Executive mandate for spend management may be less important than many believe in driving active stakeholder participation in – and compliance to – spend management initiatives.
• In many cases, tactics that are most popular (favored by the largest numbers of people) are not necessarily the most effective when it comes to producing greater contract compliance, greater participation in spend and supplier management initiatives, and greater spend-management technology adoption and usage rates.
• Companies winning high contract and procure-to-pay process compliance are somewhat more likely to be using tactics classified as „sticks (such as policies, objectives, metrics) than „carrots‟ (such as communication, customer service, training, and incentives).

Full study results will be released in approximately three weeks.

“We are excited to be preparing these study results for release,” remarks Anurag Dixit, Zycus Vice President of Marketing. “Our goal in conducting the study is to equip our customers and other interested spend management professionals with practical information they can use to drive their companies toward tangible, positive performance results through spend management.”