IBM Helps Clients Create Smarter Procurement Processes

New procurement services offerings provide more choices to clients seeking to maximize savings and reduce costs

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ARMONK, N.Y. - 22 Jul 2009: IBM (NYSE: IBM) today announced expanded procurement services offerings -- including new strategic sourcing services and new procure-to-pay services -- that can help clients increase savings from suppliers and reduce procurement costs through smarter spending. These new business process services offerings can also help clients identify favorable vendor pricing through IBM's substantial investment in infrastructure and strong supplier relationships.

IBM's new expanded procurement services offerings provide more choices and solutions for businesses focused on maximizing savings and reducing costs. For example, clients relying on high-cost, in-house procurement and payables operations can instead choose IBM's global shared services centers to perform these tasks. Similarly, companies can derive greater value from supplier relationships through IBM's strong relationships with its suppliers, and through IBM's broad experience in managing over $48 billion of spend annually.

"IBM's expanded and flexible portfolio of procurement services gives our clients a diverse set of solutions to increase their procurement savings," said William Ciemny, general manager, Supply Chain Management & Procurement Solutions for IBM Managed Business Process Services. "IBM focuses on returning cash to our clients with procurement services that will improve their competitiveness."

New Strategic Sourcing Services:

Procurement organizations are struggling to adapt to the changing global supplier marketplace. Supplier relationships need to be re-evaluated and new strategies put in place to maximize business value. IBM's new strategic sourcing services provide spend-category experts who can analyze a business' spend, develop new sourcing strategies and negotiate improved contracts with suppliers. By leveraging IBM's deep experience with the supply chain worldwide, IBM is able to rapidly implement sourcing programs to increase savings and shorten the time to value for their clients.

New Procure-to-Pay (P2P) Services:

IBM now offers companies that rely on inefficient, localized resources to perform back-office operations to instead use IBM's global shared services capabilities for procurement and payables. For companies that prefer to retain sourcing responsibilities in-house, IBM's P2P services enable them to reduce the cost of the procurement function while increasing standardization and controls. This allows them to focus on their core business activities while using IBM to manage transactional activities. IBM also provides call center support for both employees and suppliers to help improve the satisfaction and efficiency of the procurement experience.

A recent IBM-sponsored survey that sampled senior finance and procurement executives at a range of businesses around the world found that 80 percent of surveyed businesses identified maximizing savings and reducing costs as the top priorities for their procurement function. The survey also found that 90 percent of companies that have outsourced or are planning to outsource procurement were primarily motivated by cost reduction. Everest Research Institute's 2009 Procurement Outsourcing Annual Report concluded that the multi-process procurement outsourcing market witnessed 30 percent year-on-year growth in 2008, and IBM was identified as a leader of this segment both in terms of capability and market success. The report also highlighted that companies are interested in a variety of scope options for procurement outsourcing.

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