The number of purchasing organizations buying and experimenting with online sourcing and procurement tools is growing, but the actual amount of spend being put through online tools has remained relatively flat in the past year, according to a recent PURCHASING magazine survey. The poll found buyers are putting an average of 2.4% of spend through e-sourcing tools with the most advanced users still only putting 10% of total spend online.

According to the PURCHASING survey, supplier directories and databases were the most used online tool with 76% of respondents saying they use them. However, that number is only a minor uptick from the 74% of respondents who said they used supplier directories and databases in a 2002 PURCHASING survey.

Reverse e-auctions are always a topic of debate among buyers. This year's survey actually showed a leveling off in the number of respondents using e-auctions, with 15% of respondents saying they used the technology, matching the percentage from the 2002 survey. However, 64% of buyers said they will not use reverse e-auctions, up from 51% in 2002.

One purchasing professional at a healthcare firm said his organization plans to increase the use of e-auctions, but very gradually because "e-auctions only fit certain specific scenarios. We would conduct an e-auction for copy paper but not for vials and syringes. E-auctions also tend to alienate existing reliable suppliers and do not foster commitment as either a customer or supplier."

Another survey respondent said, "We have little confidence or interest in [e-auctions]" because e-auction providers and technology seem to be focused only on short-term savings and charge high fees, making them less of a long-term strategy.

The percentage of respondents using e-RFIs and e-RFQs remained fairly steady in the low 30s, but the number of buyers saying they would not use the tools jumped. In 2002, 17% said they won't use e-RFI and 19% said they won't use e-RFQs. This year, those figures jumped significantly to 28% and 31% respectively.

Online marketplace use has grown since 2002, but is still not seeing widespread adoption, likely due to market shakeout and competition. One-third of buyers (33%) said they use online marketplaces, compared to 17% in 2002, while the percent of buyers that do not use online marketplaces dropped from 75% in 2002 to 65% in 2003 (more respondents answered "N/A" to the question in 2002 than in this year's survey). One buyer said online marketplaces are counterproductive because they tend to be too "cluttered" with companies "looking to sell you anything, even if it is not their area of expertise."

Training for e-sourcing applications has not been a high priority in the past year. In the 2003 survey, 18% of respondents said their organizations dedicate resources to e-sourcing training, a decline from the 23% that reported receiving training in the 2002 survey. Fewer buyers in 2003 (45%) feel adequately skilled to make best use of Web-based procurement tools than a year ago (57%).

Roughly the same percentage (60%) of organizations are using online tools to communicate and manage documents internally today as in 2002, but fewer respondents feel comfortable having their buying information stored outside the company firewall. In 2003, 20% said they feel comfortable having data outside the firewall, while in 2002 it was 36%.

Ten percent of buyers reported using a data warehouse for purchasing information, while 39% said they plan to use one. The remaining 51% have no plans to implement any type of data warehouse. The percentage of buyers using EDI dropped slightly from 38% in 2002 to 34% in 2003. More buyers said they will not use online collaboration with suppliers in the 2003 survey (58% said they won't use it in 2003 compared with 43% in 2002).

Slightly more respondents are using online tools for risk management, but the amount (13%) is still minimal.

Fifteen percent of buyers said their organizations have mandated the use of e-sourcing tools. Enterprise e-procurement solutions for nonproduction goods and services are used by 24% of respondents, up from 19% in 2002.