Changing Corporate Culture More Important in Controlling Corporate Spending, New Aberdeen Report Finds; Leading companies indicate technology is important, but not as much as instilling enterprise-wide discipline

Business Wire, Jan 16, 2006

BOSTON -- Technology may be important in helping organizations control what they spend in complex purchasing categories, but leading companies are leaning more on tactics that can change corporate culture to help rein in spending rather than installing software, according to a new best practices report from AberdeenGroup.

The report, "Success Strategies in Category Spend Management," highlights a handful of firms Aberdeen believes meets its criteria for "best in class" based on benchmark research of more than 80 enterprises it conducted in 2004 and 2005.

The report sought to identify the organizations that were managing considerable expense lines best and the strategies they implemented to succeed. "By and large, most of these organizations confessed that they had originally done little to manage these expenses," according to the report.

To move forward, the report says, each organization revealed that it had to look hard at the internal organizational issues, then work to encourage adoption of the changes, including rollout of new technology solutions.

The report's findings lead Aberdeen to recommend the following change management strategies to guide other enterprises:

--Centralize category management and supplier negotiations -- with executive support;

--Establish a single-category purchasing policy across the company and let everyone know it will be enforced;

--Communicate the policy clearly, consistently, and ubiquitously to employees;

--Facilitate employee adherence to policies and procedures through tools that are easy to use and access; and

--Be open to changing policy and supplier mix based on performance, business needs, and employee feedback.

Aberdeen believes the last point to be critical because enterprises cannot view category management as a quick-hit cost-savings project, especially for long-neglected, complex categories. "Category spend management is an ongoing discipline that companies must build a culture around, not just deploy code," the report states.

For a complimentary copy of "Success Strategies in Category Spend Management," go to Aberdeen.com or follow this link: http://www.aberdeen.com/link/sponsor.asp?cid=2462&pid=CSM011606PR

AberdeenGroup, Inc. provides fact-based research and insights focused on the global, technology-driven value chain. Aberdeen's benchmarking, market and solution assessments, sales acceleration programs, and conferences support Global 5000 value chain and technology executives and the solution providers who serve them.

For more information, visit www.aberdeen.com or call 617-723-7890.