IBM have announced a study that says companies with high performing procurement organizations are driving better bottom line results. According to the study, these organizations report profit margins of 7.12 percent as compared to just 5.83 percent for companies with low-performing procurement organizations.
Also, companies with top performing procurement organizations report profit margins 15 percent higher than the average company – and 22 percent higher margins than companies with low performing procurement organizations.
There is a strong correlation between being a top performing procurement organization and effectively using procurement technologies. For example, in regards to Supplier Relationship Management, the study found that 94 percent of top performing companies are highly effective in their use of procurement technologies, compared to 44 percent of all surveyed companies are average or below average in their technology effectiveness.