Survey: Business Procurement Increasingly Electronic

Results from a recent Visa U.S.A. survey at the National Association
of Purchasing Management’s (NAPM) International Purchasing Conference in
Dallas indicate that electronic purchasing is surging forward.

Of those surveyed, more than 67% said they currently engage in some form of
electronic purchasing, with the number expected to grow to 85% within the next
six months.

“The industry is clearly on the brink of change,” said Bruno Perreault, senior
vice president of Commercial Card Products, Visa U.S.A. “In today’s
competitive marketplace, purchasing managers are pressed to streamline the
purchasing process and,
therefore, are increasingly looking to innovative methods such as electronic
purchasing and other payment tools to realize cost savings.”

The Visa survey found that Electronic Data Interchange (EDI) between buyers
and suppliers remains the most widely used method of electronic purchasing,
with 76% percent of respondents indicating use of an EDI system.

A significant number of companies is also purchasing goods via the Internet;
55% of those surveyed indicated they order goods directly from a supplier Web
site, while 36% make orders via intranet-based software.

Additionally, Enterprise Resource Planning (ERP) systems were cited by 45% of
the respondents as playing a role in the purchasing mix.

Of those surveyed, 30% indicated that their electronic purchasing system is
currently linked with their purchasing card program, while nearly one half
(48%) of the
remaining respondents plan to use the combination in the near future.

Although electronic purchasing methods are on the rise, companies have not yet
abandoned traditional methods of ordering goods and services. In a separate
Visa survey on purchasing and payment trends, also conducted at the NAPM show,
83% of
those surveyed indicated that they continue to order goods costing less than
$5,000 via phone, fax and mail, while 86% continue to rely on these
traditional methods for purchases over $5,000.

The findings also show that companies continue to pay for goods under $5,000
with checks. Of those surveyed, 73% reported that they typically use checks to
pay for small
dollar amounts, with the number increasing to 83% for purchases over $5,000.