SOURCE: Xchanging

Xchanging

May 15, 2013 07:00 ET

Survey Finds U.S. Businesses Plan to Spend More in 2013 With Increases in Procurement Technology and Outsourcing Investment

65% of Respondents Expect Expenditure to Be Higher in 2013 Than 2012, Indicating a Need for a Smarter, More Strategic Approach to Corporate Spending

CHICAGO, IL--(Marketwired - May 15, 2013) - A survey released today found that, while firms will spend more in 2013, they are seeking a more strategic approach to doing so. Respondents indicated there would be increased spending on a range of procurement-related technologies and that Procurement Outsourcing investments within their organizations would rise this year.

The survey "Corporate Spending and Procurement Trends - 2013" was conducted by Xchanging, (LSE: XCH), the $1B business process, procurement and technology services provider and integrator. A targeted sampling of more than 50 individuals at the Shared Services and Outsourcing Week conference in Orlando in March were polled via a 17 question, multiple-choice survey. Those polled, including procurement, finance and supply chain-related individuals, as well as senior executives, indicated they have visibility into the procurement function at their companies.

A brief sampling of the key findings include:

  • With regards to corporate spending, 67% of respondents said their company would spend more in 2013 compared to 2012, while slightly more (72%) thought U.S.-based companies, in general, would spend more this year compared to last;
  • When asked about sourcing and procurement's position in the enterprise, only 38% of respondents said their organization's C-suite viewed sourcing and procurement as strategic to the business. Even fewer, 14%, characterized their company's current approach to indirect procurement as a "C-level supported, centralized initiative with 85% spend under management," the benchmark for world-class procurement organizations. This is alarming considering indirect corporate spend alone can represent 20-40% of a company's total revenue;
  • 33% of individuals polled said their firm would increase investment in third party procurement services/outsourcing in 2013;
  • 44% of respondents felt their in-house sourcing and procurement functions were understaffed;
  • In terms of increasing usage of sourcing tools and processes, 43% ranked Supplier Management as the top focus for 2013, followed by Category Management, which 21% ranked as the top priority;
  • When asked what practices or services could benefit the firm either in terms of efficiency, cost savings or overall competitiveness in 2013, 40% of respondents felt a greater level of spend under management was the top or second priority; 34% ranked technology to help track savings to the bottom line as the top priority.

"The general consensus from our pool of survey respondents is that, with greater projected spending for 2013, organizations are looking to be more calculated in determining exactly where that money goes and how those investments are creating a return," said Indy Ghosh, Xchanging's Vice President, Head of Business Development, Marketing & Advisor Relations. "Sourcing of indirect materials -- those non-core to a company's product or service -- is generally an under-addressed spend area, where savings can be derived to hit the P&L directly or used to fund innovation. As this insight comes to light, we believe that generating excellence in indirect spending will be a particular focus for companies."

Numerous other insights with regard to corporate spending, strategic sourcing and procurement trends and technology, as well as "what's needed in 2013" were revealed from the survey. To view complete survey results, visit: www.us.xchanging.com/spendingreport.

To learn more, visit http://www.us.xchanging.com/procurement.

About Xchanging

What We Are
Xchanging provides business processing, technology and procurement services internationally for customers across multiple industries.

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Xchanging brings innovation, thought leadership and passion to its customers' businesses so as to enhance performance and value. Our values are embedded into everything we do.

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Xchanging wants to be regarded as the best provider in its chosen markets by delivering services that are recognized for outstanding quality, reliability and innovation.

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