b2b spend management survey - business credit · pr manager 650-390-1525 [email protected]. b2b spend...

B2B Spend Management SurveyBrought to you by MasterCard International and Ariba

B2B Spend Management Survey

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About MasterCard

MasterCard International provides payment solutions via member financial institutions thatenable organizations of all sizes to optimize the financial and information supply chain. TheMasterCard advantage lies in the company s ability to understand and respond to the uniqueneeds of businesses in implementing e-B2B payment solutions. Now, more than ever,organizations are concerned about corporate accountability, regulatory compliance, andfinancial transparency. The MasterCard eB2B ChoiceTM strategy provides companies withflexible platforms and a range of vendors from which to choose. MasterCard s goal is to enableorganizations to benefit from the efficiencies of a fully automated supply chain with minimumimplementation costs.

For further information, please contact:

MasterCard Internationale-Commerce and e-B2B Center of Excellence2000 Purchase St.Purchase, NY 10577USA

Philip PhilliouVice President, e-Business and Emerging Technologies (eB2B)Tel: (914) 249-6841E-mail: [email protected]

Shari KrikorianVice President, e-Business and Emerging Technologies (eB2B)Tel: (914) 249-5871E-mail: [email protected]

http://www.mastercardbusiness.com/e-B2B/

About Ariba

Ariba Inc. is a leading enterprise spend management (ESM) solutions provider. Ariba helpscompanies develop and leverage spend management as a core competency to drive significantbottom-line results. Ariba Spend Management software and services allow companies to aligntheir organizations with a spend-centric focus and deploy closed-loop processes for increasedefficiencies and sustainable savings.

For further information, please contact:

Ariba Inc.(650) 390-1000http://www.ariba.com/

Ingrid BellPR [email protected]


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Contents

1. Introduction ............................................................................................ 3

2. Summary of Quantitative Responses Overall .................................... 4

2.1 Demographics ................................................................................. 4

2.2 Purchasing and Corporate Card Programs.................................. 8

2.3 Enterprise Resource Planning System....................................... 10

2.4 Electronic Invoice Presentment and Payment System............. 12

2.5 Automated Expense Management System ................................ 16

2.6 Satisfaction.................................................................................... 18

3. Respondent Profile and Survey Methodology .................................. 20


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1 Introduction

MasterCard International and Ariba recently conducted a survey of 153 professionals withdecision-making or influencing power over corporate purchasing methods. The survey foundthat two out of every three companies with annual revenues exceeding $500 million now usesome form of Electronic Invoicing Presentment and Payment (EIPP) to streamline their financialmanagement processes. The survey characterized forms of EIPP as solutions that enableeither EDI or non-EDI electronic invoice receipt or presentment, or the ability to accept or makeelectronic payments.

Highlights of the B2B Spend Management Survey include:

• 66 percent of respondents currently use some form of an EIPP system (including bothelectronic data interchange [EDI] and non-EDI);

• 62 percent rely on such technology to make electronic payments to suppliers; and35 percent use the technology to receive payments from customers

• More than half the respondents (51 percent) cited the reduced processing time andresulting lower costs as the primary benefits of using EIPP

• Survey respondents cited cost (25 percent), complexity (22 percent), and aversion tomaking changes to their IT systems (19 percent) as the top reasons for not deploying anEIPP system

• 69 percent of respondents whose companies currently do not have EIPP systemsreported plans for a future deployment; 48 percent of those implementations areexpected in the next year and an additional 32 percent are planned for the next one totwo years


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2 Summary of Quantitative Responses Overall

2.1 Demographics (seven questions)

Below is a summary of the demographic characteristics of the survey group.

Question 1: Which job title best describes you?

1%

2%

47%

3%

34%

4%

4%

5%

1%

0% 10% 20% 30% 40% 50% 60%

Other

CPO

VP Finance

VP Purchasing

VP Travel

VP Procurement

Manager A/R

Manager A/P

eBusiness

eBusiness professionals make up nearly half of survey respondents. Just over one-third oftotal respondents noted that they work in other departments including:

• IT Manager or Director• Manager of Procurement• Manager of Purchasing


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Question 2a: Your company s annual revenue:

16%

8%

4%

7%

66%

0% 10% 20% 30% 40% 50% 60% 70%

500 Million - 999 Million

1 Billion - 1.49 Billion

1.5 Billion - 1.99 Billion

2 Billion - 2.49 Billion

2.5 Billion and Over

Over 60% of the companies represented by this survey have annual revenue of over $2.5billion.


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Question 2b: The areas in which your company has a physical office:

97%

58%

47%

18%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

Europe

Asia

Other

Nearly all of the companies represented by this survey have offices in the United States — alarge percentage have offices around the world. Approximately 58% also have offices inEurope, and 47% have offices in Asia. Other regions noted by respondents included LatinAmerica, South America, Canada, Africa, India and Australia.

Question 2c: The number of your company s employees:

11%

32%

30%

14%

8%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

< 10,000

10,000 to 49,999

50,000 to 99,999

100,000 to 149,999

150,000 to 199,999

200,000 +

Just over half of the companies surveyed employ less than 50,000 people.


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Question 3: Identify the industry your company represents:

3%

1%

1%

1%

6%

9%

7%

3%

22%

17%

2%

6%

11%

12%

0% 10% 20% 30%

Other

Healthcare

Discrete Manufacturing

CPG/Retail

High Tech

Financial Services

Diversified Chemicals

Public Sector

Logistics & Transportation

Oil & Gas

Pharmaceutical

Software & Services

Telecom

Utilities & eEngergy

Respondents industries varied fairly equally across the board. Financial Servicescharacterizes a majority of respondents with 22%, but other popular choices included HighTech and CPG/Retail. Approximately 17% of respondents choose other to describe the mainindustry their company is engaged in. Some of these other responses includedManufacturing, Specialty Materials, Automotive, Consulting, Distribution, Document Finishing,eCommerce, Electronics Distribution, Entertainment, Mining, Port Services, Printing Ink,Process Manufacturing, and Research and Development.


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Question 4: How has your company addressed the need to comply with new corporategovernance procedures? (check all that apply)

64%

66%

34%

71%

48%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Automating Existing Manual Processes

Implementing New Technology Systems

Establishing Digital Paper Trails

Improving Internal Controls

Instituting a Monitoring Process for ContinuedCompliance Over Time

In order to comply with new corporate governance procedures, most respondents noted thattheir companies have improved internal controls, implemented new technology systems andautomated existing manual processes.

2.2 Purchasing and Corporate Card Programs (three questions)

Question 5a: Does your company have a purchasing card program?

83%

17%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Yes

No


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Question 5b: What percentage of spend is purchased via payment cards?

18%

39%

24%

18%

0% 10% 20% 30% 40% 50%

< 1%

1% > 5%

5% > 10%

> 10%

Question 6: Do you have a corporate card program (for travel and entertainmentexpenses)?

89%

11%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes

No

Just over 80% of those surveyed noted that their companies have a purchasing card program,while nearly 90% have a corporate card program for travel and entertainment expenses. Almost40% of those surveyed note that less than 5% of their spend is purchased via payment cards.


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Question 7: The number of business travelers in your company:

2%

62%

23%

9%

4%

1%

0% 10% 20% 30% 40% 50% 60% 70%

< 10,000

10,000 to 49,999

50,000 to 99,999

100,000 to 149,999

150,000 to 199,999

200,000 +

At 62%, a majority of respondents note that less than 10,000 of their company s employeestravel for business, although 23% have between 10,000 and 49,999 traveling employees.

2.3 Enterprise Resource Planning System (three questions)

Question 8a: Do you have an enterprise resource planning (ERP) system?

77%

23%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Yes

No


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Question 8b: Which ERP do you use?

25%

16%

21%

36%

2%

0% 10% 20% 30% 40%

Other

Oracle

PeopleSoft

SAP

GEAC

Of the 77% of survey respondents who use an enterprise resource planning (ERP) system, asignificant percentage use SAP, Oracle and People Soft. Responses in the other categoryincluded Computron, CODA, MFG/PRO, Invensys Protean, JDedwards, Lawson, Legacy,ManufacTech, Microsoft Navision, Mincom MIMS and Trams. 15% of this group noted they usevarious systems and 5% were not sure what their organization uses.


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Question 8c: How satisfied are you with the integration of payment card data with yourcompany s ERP system?

10%

30%

42%

10%

9%

0% 10% 20% 30% 40% 50%

Very Satisfied

Satisfied

Neither Satisfied or Dissatisfied

Somewhat Dissatisfied

Very Dissatisfied

Overall, respondents are satisfied with the integration of payment card data with theircompany s ERP system although 42% are neutral.

2.4 Electronic Invoicing Presentment and Payment System (four questions)

Question 9a: Which of the following types of electronic invoicing presentment andpayment (EIPP) systems does your company use? (check all that apply)

35%

62%

13%

58%

35%

43%

23%

0% 10% 20% 30% 40% 50% 60% 70%

None of the Above

Electronic Invoice Presentment (EDI)

Electronic Invoice Presentment (non-EDI)

Electronic Invoice Receipt (EDI)

Electronic Invoice Receipt (non-EDI)

Electronic payment to suppliers

Electronic payments from customers

Of the majority of respondents whose companies use Electronic Invoicing Presentment andPayment (EIPP) for either accounts receivable or accounts payable, electronic payments tosuppliers and electronic invoice presentment (EDI) are the most popular systems.


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Question 9b: How long has your company used each of the EIPP systems? (if applicable)

(a) Electronic Invoice Presentment (EDI)

7%

14%

28%

52%

0% 10% 20% 30% 40% 50% 60%

0 - 6 Months

6 - 12 Months

1 - 2 Years

2 + Years

(b) Electronic Invoice Presentment (non-EDI)

9%

13%

26%

52%

0% 10% 20% 30% 40% 50% 60%

0 - 6 Months

6 - 12 Months

1 - 2 Years

2 + Years

(c) Electronic Invoice Receipt (EDI)

9%

17%

24%

50%

0% 10% 20% 30% 40% 50% 60%

0 - 6 Months

6 - 12 Months

1 - 2 Years

2 + Years


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(d) Electronic Invoice Receipt (non-EDI)

17%

20%

30%

33%

0% 10% 20% 30% 40%

0 - 6 Months

6 - 12 Months

1 - 2 Years

2 + Years

(e) Electronic payment to your suppliers

4%

22%

24%

49%

0% 10% 20% 30% 40% 50% 60%

0 - 6 Months

6 - 12 Months

1 - 2 Years

2 + Years

(f) Electronic payments from your customers

4%

14%

18%

64%

0% 10% 20% 30% 40% 50% 60% 70%

0 - 6 Months

6 - 12 Months

1 - 2 Years

2 + Years


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Below is a snapshot of the length of time companies have used each of the following EIPPSystems:

• Electronic Invoice Presentment (EDI) — more than 2 years• Electronic Invoice Presentment (non-EDI) — more than 2 years• Electronic payments from customers — more than 2 years• Electronic Invoice Receipt (non-EDI) — more than 1 year• Electronic Invoice Receipt (EDI) — more than 2 years• Electronic payments to suppliers — more than 2 years

Overall, it appears that companies using any of the EIPP systems have done so for over 2years, although one third of companies using the non-EDI version of electronic invoice receipthave used the system between 1 and 2 years.

Question 9c: What is the No. 1 benefit your company has gained since implementingEIPP?

14%

3%

51%

10%

12%

10%

0% 10% 20% 30% 40% 50% 60%

Other

Reduced processing time resulting in reducedprocessing costs

Enables the capture of early payment discounts

Enables redeployment of manpower

Provides timely and reliable data

Reduces exceptions

Overall, companies that use EIPP systems benefit from reduced processing time, whichreduces processing costs.


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Question 9d: If your company does not use an EIPP system, why not? (check all thatapply)

14%

44%

25%

22%

19%

3%

0% 10% 20% 30% 40% 50%

Other

Cost

Complexity

Don’t want to make any IT changes to the system

Don’t trust the technology

Security concerns

Respondents whose companies do not have an EIPP system note cost as the number onereason; complexity and an aversion to making IT changes also came up frequently. Othersurvey responses explaining why some companies do not already have an EIPP system notedthat organizations were in the process of implementing an EIPP system, they don t know or theyare not ready.

2.5 Automated Expense Management System (two questions)

Question 10a: Which automated expense management system do you use?

7%

5%

23%

42%

12%

1%

8%

0% 10% 20% 30% 40% 50%

Other

Ariba

Concur

Necho

Oracle

PeopleSoft

SAP

Ariba is the most popular version of the Automated Expense Management System. Otherresponses included:

• Captura• Express• Extensity• GEAC• Homegrown• In House


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• Interplex• Organic

Question 10b: Why do you choose not to use an automated expense managementsystem? (check all that apply)

50%

22%

28%

13%

9%

0% 10% 20% 30% 40% 50% 60%

Other

Cost

Complexity

Don’t want to make any IT changes to the system

Security Concerns

Complexity is the main reason some of the companies surveyed are not currently using theAutomated Expense Management System followed by cost and an aversion to making ITsystem changes. Significant other responses include respondents with companies that areresistant to change. In addition, respondents noted controller s concerns, corporate politics, theuse of in house tools, limited application, and other priorities.


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2.6 Satisfaction (four questions)

Question 11: How convinced are you of the ability of payment and spend managementsolutions to deliver ROI/cost savings?

50%

32%

16%

1%

1%

0% 10% 20% 30% 40% 50% 60%

Very Convinced

Somewhat Convinced

Neither Convinced or Unconvinced

Somewhat Unconvinced

Very Unconvinced

Overall, this group is very convinced that payment and spend management solutions have theability to deliver ROI/cost savings.

Question 12: How satisfied are you with your organization s current ability to aggregatevendor contracts across various departments?

12%

30%

29%

22%

7%

0% 10% 20% 30% 40%

Very Satisfied

Satisfied



Very Dissatisfied


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Question 13: How satisfied are you with your organization s current ability to leveragesupplier discounts by meeting early payment deadlines for invoices?

14%

33%

20%

25%

8%

0% 10% 20% 30% 40% 50%

Very Satisfied

Satisfied



Very Dissatisfied

Question 14: How satisfied are you with the current level of information you canaccess/view regarding your company s organizational spending?

10%

27%

30%

26%

9%

0% 10% 20% 30% 40% 50%

Very Satisfied

Satisfied



Very Dissatisfied

Overall, respondents are not overwhelmingly satisfied or dissatisfied with their organization sability to aggregate vendor contracts across various departments, their ability to leveragesupplier discounts by meeting early payment invoice deadlines, or their current level ofinformation regarding their company s organizational spending that they can access.


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3 Respondent Profile and Survey MethodologyAn online survey (https://www.infosurv.com/mst.html) was administered to participants in theAriba LIVE convention. All valid survey respondents must have indicated decision-making orinfluencing power over corporate purchasing methods (i.e., credit card, check, etc.)

Respondents were invited to take the survey at a convention kiosk, and responses werecollected from 5/3/04 until 5/4/04. Ultimately, 153 respondents submitted a response yielding astatistically significance of +/- 7.92% confidence interval at the 95% confidence level.

b2b spend management survey - business credit · pr manager 650-390-1525 [email protected]. b2b spend...

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