Web-Based Procurement Doubles Each Year, Says IDC

According to research company
IDC, Web-based
procurement more than doubles in size each year, with
a compound annual growth rate of 105 per cent.


Worldwide, the Internet commerce procurement applications
market topped $147 million in 1998, and is expected to
reach $5 billion by 2003.


Most significant of IDC’s findings is the fact that
web-based procurement is very much more cost-effective
than conventional methods. Projected savings from
Internet commerce procurement will top $103 billion
on transactions totalling $1.375 trillion by 2003, says
the firm.


“More and more businesses are beginning to understand
Internet commerce procurement applications can deliver
tangible results to their bottom line, lowering costs
while boosting overall efficiency and maybe even stock
value,” said Albert Pang, manager of IDC’s eCommerce
Software research program.


“As a result, they are increasingly turning to the
Internet to buy goods and services from their suppliers
and trading partners, placing orders on everything from
office supplies to safety equipment to temporary
personnel.”


In the United States, Visio, a Seattle-based software
vendor, reported a reduction in order processing costs
from $113 per purchase order to $6, after installing
a web-based procurement system a year ago.


As for the number of users of Internet commerce procurement
applications: they will skyrocket from 600,000 in 1999 to
250 million by 2003, says IDC.


In fact, it all “bodes very well for the market,” according
to IDC’s estimations. After this week’s stories of the
Web “shrinking” — as a result of people browsing
favourite sites rather than exploring further — IDC’s
reminder of the web’s other dimensions is very timely.

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