With the procurement department being thrust into a strategic limelight as a means of driving operational performance, 2010 sees enterprises struggling to discover, identify and drive new means of cost savings within their corporate spending, according to a new research study published by Aberdeen.
Strategic Sourcing: The 2010 Guide to Driving Savings and Procurement Performance gauged the sourcing programs, processes and performance of over 400 enterprises and found that in a time of economic recovery, enterprises are adamantly focused on driving cost reductions through their strategic sourcing efforts. Although there is a zeroed-in cost savings focus, the new research study found that nearly 2.2 percent of the average's cost savings are lost due to savings leakage.
"Savings leakage is a prime concern for enterprises in the midst of economic recovery," says Christopher Dwyer, research analyst, Aberdeen. "Gaps in technology and process, as well as a failure to conduct due diligence and apply efficiencies in contract lifecycle management, are causing organizations to lose a significant chunk of their identified savings."
The new study found that best-in-class enterprises, which have effectively placed nearly 32 percent more of their spend under the management of the procurement group than all other organizations, have leveraged a series of best practices and technology solutions, such as e-sourcing and spend analysis, to avoid savings leakage and drive over 10 percent cost savings to the bottom-line.
