ESF Benchmark Analysis - Day 4

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ESF Benchmark Analysis - Day 4 by David Bush March 23, 2006	Go Back

Companies need for decision optimization As I mentioned in earlier blog entries, strategic e-Sourcing is not just reverse auctions. Let’s talk a little more about another good use of an e-Sourcing tool – tools that support decision analysis. Decision Optimization tools can be used for both complex and not-so-complex decision analysis.

• All companies, regardless of size, face complex award decisions at one time or another. Very few organizations (17%) use decision analysis tools to help make complex award decisions. In addition to relying on spreadsheets and email, companies need to coordinate decisions across multiple people in multiple regions and locations. Since these companies do not use e-Sourcing technology for decision analysis, they are further burdened with spreadsheet version control, project management issues and complicated email traffic trails. Though few organizations use decision analysis tools for sourcing analysis, 81% of the respondents indicated that they make complex award decisions which would warrant the tool’s use.

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This is truly an amazing statistic. Basically, the overwhelming majority stated that they had spend that required complex analysis and award decisions. Conversely, the overwhelming majority stated that they are making those same decisions without the assistance of any type of technical tool. Depending on the type of category and factors involved, it is reasonable to assume that Decision Optimization tools can identify an additional 5-10% savings over traditional methods but are being left on the table.