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E-Business Purchasing is Slipping

    Online News published in DMReview.com
April 17, 2002

The sixth quarterly "Report on eBusiness" from the Institute for Supply Management and Forrester Research Inc. has found slippage in several areas of online buying, including the number of organizations doing online purchasing of direct goods and shares of both direct and indirect goods purchased online.

"Although the numbers are somewhat mixed, there is still a lot of optimism," Edith Kelly-Green, head of the ISM committee responsible for the report and vice president and chief sourcing officer for FedEx Corp., says.

Green notes that the report also showed that use of the Internet as part of a request for proposal process had increased during the quarter ended in March with 72.2% of large-volume buying organizations reporting this use, up from 65% in the previous quarter. "Companies are using the Internet wherever they see value to their organizations," Kelly-Green says. "Value was shown to be in the RFP process."

The Tempe, Ariz.-based ISM and Cambridge, Mass.-based Forrester report that the number of purchasing organizations reporting use of the Internet for buying indirect goods and services remained roughly unchanged in the most recent quarter at 78.1%. Respondents reported purchasing 8.3% of their indirect materials and 5.7 % of their direct materials over the Internet, down from 9.5% and 6.2%, respectively a quarter earlier.

Usage of the Internet for buying direct goods and services slipped to 53.3% of organizations from 57.2% in the previous quarter.

The report also found that organizations are reducing their participation in online auctions and marketplaces, with auction buying falling to 20.3% of organizations from 23.1% in the previous quarter while marketplace buying slipped to 22.2% from 26.4%.

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