New research from technology firm blur Group has found that about half of procurement decision makers believe that there are superior service providers than their current partners, and 46 percent of companies think that they engage with the same partners for too long. Companies are looking for innovative approaches to supplementing business knowledge but 65 percent of procurement decision makers at large companies think that having long-term relationships with service providers results in fewer creative solutions. A further 43 percent agree that personal ties, preferred suppliers lists, and other extraneous factors force a continued relationship with providers demonstrating poor performance.
“Business isn’t a marriage, but right now U.S. businesses must certainly feel like they’re trapped in an unhappy one with their service providers,” Philip Letts, CEO of blur Group, said. “The decline in creativity could be due to the trouble they have finding the most relevant providers for their needs. This could be solved using an s-commerce platform bringing together the functionality of enterprise class cloud services, marketplaces and community.”
Additional findings from the research include:
- Search engines are used by 55 percent of companies when finding and interacting with service providers.
- 55 percent of survey participants said that finding the most relevant service provider was a challenge during the procurement process.
- 67 percent of procurement decision makers from large companies admit that their strategy is more standardized and needs a refresh. This compares to 48 percent of medium-sized companies. However, 21 percent of large companies are more likely to perceive their procurement as innovative, compared to 7 percent for medium-sized companies.
- Over 40 percent of companies admitted to personal biases when choosing service providers but 87 percent would like to partner with new providers. Only 70 percent of companies feel free to switch to new providers.