Aberdeen Group recently released “The On-Demand Supply Management Benchmark Report: Enterprises Turn to the Web and Find Quicker and Better ROI to Help Achieve Supply Management Goals“. (A copy of this report was available for a limited time from Iasta, who licensed it for distribution and made it available on the e-Sourcing Forum [WayBackMachine].)

There are a number of significant findings in this report. Since you can download it for free, I will not attempt to cover the findings in depth here, but simply display the following teasers that should get your mouth watering for more!

• 57% of survey respondents indicated that on-demand performs better than traditional installed behind-the-firewall legacy applications with a further 33% indicating that on-demand performs about the same; that’s 90% of respondents agreeing that on-demand performs as well or better than traditional legacy applications
• 57% of survey respondents indicated that on-demand systems are easier to upgrade than traditional installed behind-the-firewall legacy applications with a further 34% indicating upgrades required about the same amount of effort; that’s 90% of respondents agreeing that on-demand systems are at least as easy to upgrade as traditional legacy applications
• 52% of survey respondents indicated that on-demand systems require less implementation time and effort than traditional installed behind-the-firewall legacy applications with a further 39% indicating installs took about the same amount of time and effort; that’s 91% of respondents agreeing that on-demand is at least as fast to implement as legacy systems, if not faster
• enterprises deploying on-demand solutions improve spend under management by 28% more than enterprises that deploy installed on-site solutions over the course of a year … 28% … considering that the savings potential for each dollar of spend under management is between 5% and 20%, even if the actual savings realized is only 30.3% of planned savings (industry average – best in class do much better), then you are looking at a savings of at least 1.2M for every 1B … 1.2M+ … and considering that decent on-demand suites can be obtained for 250K/year (not counting professional services), you could easily save 1M just by using on-demand! ( If you are best-in class and capture 70% of planned savings and efficient and get 15% on each dollar of spend under management, you save roughly 3M more on every 1B going with an on-demand solution! )

And that statistic sums up nicely everything I’ve always believed about the inherent value of on-demand. For more of my views, check out my 3-part series over on e-Sourcing Forum if you haven’t already (The Good, The Not-So-Bad, And the Coming Pretty …) and Sudy Bharadwaj’s thoughtful commentary, also on e-Sourcing Forum.

Have a great day and enjoy the study!

You might also enjoy “A Six Step Framework for On Demand Supply Management”, released on the same day as well (login required). Part of Aberdeen Group’s Enterprise Strategies: Insight and Advice for Enterprise Executives, it overviews the Aberdeen PROFIT Framework for Supply Management as a Service (SMaaS). The PROFIT Framework was designed “to aid supply management evaluators in understanding how to deploy an On Demand solution to drive value”. It provides a series of Process, Regulatory, Operational, Financial, Intelligence, and Technology questions whose answers are designed to help you make the right decision.