Buyers still prefer to closedeals the 'old-fashioned' way
By Mark Vigoroso -- Purchasing, 4/9/1998
From its inception in 1972, e-mail was hailed as a trail blazer in business communications. It was then--and remains so today. Still, Purchasing's latest reader survey finds that while buyers certainly are reaping the benefits of e-mail, they're not ready to abandon their phones and fax machines.The upside
According to the survey, fully 84% of buyers have a business and/or personal e-mail account, and of the 16% who do not, one-third will have an account within six months. It can be as-sumed that buyers use e-mail for miscellaneous correspondence with co-workers and suppliers, so we asked purchasers to identify specific procurement functions they fulfill using e-mail. Here's how e-mail-enabled buyers responded:
* Transmit requests for proposals (59%).
* Research new suppliers (39%).
* Send supplier-evaluation documents (24%).
* Use to produce written evidence of supply contracts (24%).
* Negotiate supplier contracts (22%).
* Close contracts (12%).
* Remit payments for procured goods (2%).
Respondents testify to the benefits of e-mail as a tool to facilitate these functions. One buyer writes, "Given today's active environment, e-mail provides for a quick method of communication. Information sharing is greatly enhanced--particularly with the ability to send mail with attached...documents."
Many purchasers share an appreciation of e-mail's built-in "paper-trail" capability. Edward J. Wilson, procurement manager at Connecticut-based Pratt & Whitney, writes, "e-mail...gives a written, archivable record of conversations without having to confirm by mail." Alyssa Reid, buyer at Compatible Systems in Colorado, agrees: "It provides a hard copy for situations that would have been 'he said, she said.'"
Handling correspondences via e-mail puts buyers more in charge of their time. It allows them to make many contacts in a short period of time, freeing them to work on other tasks. In fact, when asked whether e-mail is saving time, wasting time, or having no measurable effect, 77% say it's a time-saver, while 14% say it has no effect, and just 4% say e-mail wastes their time. Michael Lastovich, buyer at Illinois-based Westell, writes, "e-mail...saves me, at the very least, 3-4 hours per week. Without it, I would spend much more time hunting people down for status updates."
Subscribing to the ad-age that time is money, it comes as no surprise that a 67% majority say e-mail is saving their company money. A minuscule 3% see e-mail as a money-waster and 24% say it has no measurable effect. Kevin Parker, buyer at L&S Machine Co., values manhours saved at about $100 per week. Jan Graff, purchasing manager at Tri-Clover Inc., puts the figure at up to $300 per week.
The downside
Like any tool, e-mail has its limitations. Its impersonal nature is a common drawback cited by buyers. "E-mail is too impersonal to allow for real negotiation. [Sometimes] it is better to meet co-workers in person. It helps in developing relationships," writes David Woods, purchasing agent at South Carolina's Asco Pneumatic Controls. Another buyer writes, "Some people use e-mail as a crutch or as a substitute for personal contact when personal contact is truly required." Other shortcomings mentioned are security breaches, network system problems, and exclusion of companies without e-mail access.
By no means do buyers view e-mail as a turn-key solution that will fossilize other modes of communication. In fact, when asked what percentage of their job tasks they fulfill via e-mail, nearly all of the buyers polled say fewer than half. A hearty 64% fulfill fewer than 25% of their tasks via e-mail, 28% say 25%-50%, 8% say 50%-75%, and nobody says more than 75%.
As for submitting RFQs, relaying terms of supplier contracts, or transmitting supplier-evaluation documents, buyers continue to rely most frequently on Old Faithful: the telephone. We asked buyers to rank the frequency and preference with which they use various modes of communication. Telephone comes out on top in both cases, e-mail is the third most frequently used and the second most preferred, while fax is the second most frequently used and the third most preferred. Granted, these proportions are likely to tilt toward e-mail as the "information age" progresses, but e-mail has yet to topple the mainstays of buyers' communication channels.
Going forward, expanded use of e-mail in the purchasing field will be determined by the simple metric of whether or not it enables buyers to perform their jobs better. We asked buyers this question, and of the 73% who responded, 91% said yes. While it is true that the Internet as a whole is changing and will continue to change the purchasing function, any ground-breaking developments will likely spawn from advancements in e-commerce, in-tranets, extranets, and the like. E-mail, on the other hand, simply offers buyers another effective channel through which to conduct business.
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