YANKEE GROUP SURVEY INDICATES THAT 75 PERCENT OF SURVEYED SUPPLIERS AGREE
18 January 2005 - Global Exchange Services (GXS)

A recent survey conducted by the Yankee Group and sponsored by Global eXchange Services, a leading provider of B2B e-commerce solutions, revealed that companies who make the initial investment in product information management solutions, experience an annual business improvement that averages 25 percent. The Yankee Group's 2004 Product Information Management Survey, which measured 'both operational effectiveness as well as top-line business growth improvements across 28 categories,' found that 75 percent of respondent companies that supply goods to retailers agree PIM is a strategic investment for their organizations. The study also noted that an enterprise's ability to effectively exchange information with its partner community will increasingly define corporate success over the next five years.

The report stated that 'companies are not just seeking (and realizing) reduced costs from invoice errors; they are experiencing top-line business benefits across categories including: optimized promotions, improved customer loyalty, improved customer service and better channel relationships.'

'For companies that have deployed PIM, the annual business improvement averages 25 percent,' said Kosin Huang, senior analyst at the Yankee Group and author of the study. 'The time to act is now and it is no longer just the leading innovative retailers taking charge. Suppliers alike recognize the impact of PIM and will use their PIM IT strategy to differentiate themselves to retailers as preferred partners that can showcase impressive supply chain success.'

When examining the cost savings in 18 categories, the Yankee Group found that the largest savings are expected in the management of new product introduction processes. Day-to-day management of product information, product discontinuation and product returns placed second, third and fourth. The cost savings were measured for categories such as Web site content management, call center staffing, order fulfillment rates, inventory management, out of stocks, promotion, product returns, write-offs and invoice deductions.

The Yankee Group measured benefits for categories such as customer loyalty, customer service, channel relationship management, product and brand management collaboration with partners, suppliers and employee productivity. The top benefit anticipated by Do-It-Yourself/Hardline Suppliers is to reduce logistical costs through better forecasting of supplies. As a result, grocery suppliers will expect logistical cost savings as a top benefit of PIM solutions. The top problems facing suppliers today is wasted dollars from invoice deductions, sluggish time-to-market, time spent relaying basic product information to customers, hours reconciling invoices, and unnecessary warehouse labor processing incorrect shipments and returns.

A PIM solution is a system that consolidates product information from multiple sources in multiple formats into a central repository and enables organizations to create, edit, and disseminate that information with external audiences through Web sites, data pools such as UCCnet, customers or any other targeted means.

According to the report, 'PIM ROI is so compelling that many companies have moved forward with their PIM implementations accessing benefits in only one or two key categories, such as invoice reductions or improvements in speed to retail for new items, price changes or promotions.'

The Yankee/GXS study surveyed 350 IT and business decision makers that have either implemented a PIM solution or plan to in the next 12 months. Responding companies had annual revenues ranging between $250 million and $5 billion. The survey was Web-based with 27 multi-faceted questions that generated over 100 answers. The objective was to identify key business investment drivers, spending plans, total-cost-of-ownership information and ROI or benefits gained.

The Yankee Group is the global leader in communications & networking research and consulting. The company helps businesses understand the opportunities, risks and competitive pressures of developing, deploying and consuming products and services that drive communication or information exchange. Now in its fourth decade, the Yankee Group is based in Boston with offices throughout North America and Europe.

http://www.gxs.xom

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