April 28, 2004—Elance, Inc. recently announced the results of a new study conducted by analyst firm Forrester Research, which shows that improving the sourcing and procurement of services is a high priority for most companies.
Although, the majority of respondents have achieved their savings targets or better from investments in goods procurement tools, 50% of all respondents now consider improving the way they source and purchase business services (such as consulting, contingent labor and business process outsourcing) as critical or important to their organizations in 2004. This priority is especially high among large enterprises (those companies with annual revenues of $1 billion or more), with 59% of these respondents saying that improving the way they source and purchase business services is critical or important.
The survey, conducted in March 2004, included 92 responses from a wide variety of senior decision makers including CIOs; CPOs (Chief Procurement Officer); IT and Procurement Vice Presidents, and other C-level executives. These executives were asked about their adoption of technology solutions for contract management, procurement and sourcing; the effectiveness of these solutions; their own organization’s effectiveness in purchasing services; and the importance of improving the way their organizations source and procure business services.
The survey asked respondents to rate their organizations’ effectiveness in purchasing business services—such as IT outsourcing, consulting services, contingent labor and other forms of business process outsourcing—along a number of different axes. Overall, respondents rated their companies’ capabilities as only moderately effective and survey results reveal that companies are least confident in their ability to effectively evaluate the performance of service providers. The second most difficult area for companies today is in managing complex service engagements and ensuring that payments are made only against approved deliverables, service level or labor hours.
Respondents were also asked to rate their companies’ effectiveness in ensuring that services purchases are made in compliance with Sarbanes-Oxley regulations and in compliance with HR and co-employment/temporary labor regulations. In both cases, a large percentage of respondents could not rate the effectiveness of their companies in these areas.
For more information, contact Elance.
