The eSourcing Market Is Rapidly Evolving, According to IDC

FRAMINGHAM, MA – FEBRUARY 21, 2001 – The esourcing market is rapidly evolving and promises a robust opportunity for both software and service vendors. According to IDC, combined esourcing/supplier management/eprocurement service revenues will increase to 20% of the total supply chain service market in 2004 – up from 4% in 1999.

 

"eSourcing is emerging as a foundation upon which rests the success of an eprocurement implementation," said Nelly Zaharinov, senior analyst with IDC's Supply Chain Services research program. "Because of the complexity of procurement business processes, companies are turning to both service providers and software vendors to get a combination of strategic business advice, implementation services, and powerful software tools that enable them to rationalize, automate, and manage the upfront sourcing process."

According to IDC, the major benefits of esourcing are its abilities to address the difficulties of strategic sourcing assessment, automate most routine tasks, provide spending and category management visibility and control, maintain sourcing history, and transfer best practices into everyday purchasing operations.

In the near term, IDC expects not only management consulting but also Internet services and emarketplace services firm offerings to include strategic sourcing analysis and implementation of esourcing tools because clients will increasingly realize that to derive maximum value from eprocurement, they need to conduct sourcing analysis.

As the esourcing market rapidly evolves, IDC believes both software and services firms should develop joint offerings and go with a single solution to market. "Achieving competitive advantage and market share in the esourcing market will require creativity and sound partnerships. eSourcing tools alone have limited value if not backed up by sourcing and industry expertise of consultants," Zaharinov said.

IDC's recently published bulletin, A Better Way of Doing Strategic Sourcing: eSourcing Definition and Related Service Opportunities (IDC #B23725), defines the three major components of the procurement business process – strategic sourcing, supplier management, and day-to-day purchasing. Specifically, this bulletin discusses the role of strategic sourcing in the success of an eprocurement project. To purchase this bulletin, contact Jim Nagle at 1-800-343-4952, extension 4549, or at jnagle@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

 

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