NAPM/Forrester Research Announce Results From The Latest Report on eBusiness

B2B Adoption Of Online Activities Continues To Expand in Selected Areas

(TEMPE, Ariz. AND CAMBRIDGE, Mass.) July 16, 2001 — The National Association of Purchasing Management (NAPM) and Forrester Research, Inc. (Nasdaq: FORR) announce the release of the third NAPM/Forrester Research Report on eBusiness, a first-of-its-kind report that tracks online activity for both manufacturing and non-manufacturing organizations. The report found that nearly 73% of organizations use the Internet for indirect purchases — an increase from 71% reported last quarter. During the same period, 54% of buyers reported using the Internet to purchase direct materials — an increase from last quarter's level of 46%. These online buyers reported sending 9.8% of their total direct materials order over the Internet.

"The full impact of economic conditions are seen in a mixed progress by many of our responding companies. While the general trend is positive, I believe there is now more of a tendency to wait and see before making major strides. This does not mean that the goal is being reassessed, but that the timing may not be as quick as initially planned," says Edith Kelly-Green, vice president, sourcing and procurement, FEDEX.

"The Internet continues to expand as a buying channel but the panacea has lifted. Buyers realize that eProcurement takes more than surfing on supplier Websites," said Bruce D. Temkin, group director at Forrester. "That's why we're seeing a growing number of organizations changing their procurement practices — and running into the difficulties of integrating their purchasing systems."

The Report on eBusiness also revealed that the use of online auctions significantly expanded — over 20% of organizations bought products or services through an online auction, up from 15% last quarter. The number of large-volume buying organizations reporting online collaboration with suppliers dropped to 46% from the 56% level reported last quarter. At the same time, small-volume buyers increased their online collaboration activity to 41% from nearly 35% last quarter.

For the Report on eBusiness, NAPM and Forrester Research received survey replies from supply management executives from both manufacturing and non-manufacturing organizations. To understand the difference in online behaviors of these organizations, the report analyzes three areas: the results of all organizations; the comparison of manufacturing and non-manufacturing organizations; and the comparison of organizations that procure more than $100 million per year and those that purchase less than $100 million per year. To track the adoption of different activities over time, NAPM and Forrester created the eBusiness Adoption Momentum index (eBAM).

The NAPM/Forrester Research Report on eBusiness, developed in fall 2000, measures the adoption of Internet-based procurement. NAPM and Forrester Research developed the survey jointly and will issue the report every three months in a manner similar to the monthly NAPM Report On Business®.

About NAPM

Founded in 1915, the National Association of Purchasing Management (NAPM) is one of the most respected educational organizations in the United States. NAPM is a communication link with more than 47,000 supply management professionals. NAPM is a progressive association with a mission to provide national and international leadership in supply management, particularly in the areas of education, research, and standards of excellence. Through various resources and a network of affiliated organizations, NAPM provides opportunities for expansion of professional skills and knowledge. A not-for-profit association, NAPM offers a wide range of educational products and programs.

NAPM has provided a rich history of economic data for over 67 years on the U.S. economy with its Manufacturing NAPM Report On Business® and the Purchasing Managers Index (PMI). Since June 1998, NAPM has also been publishing the Non-Manufacturing NAPM Report On Business®. Both surveys can be found at www.napm.org.

About Forrester Research

Forrester Research is a leading emerging-technology research firm, analyzing technology change and its impact on business, consumers, and society. Forrester's "Whole View" provides clients with a comprehensive set of research that reveals how technology change affects their customers, drives their business strategies, and dictates their investment in technology. Clients receive continuous research and analysis through Forrester eResearch™ Reports, an array of Advisory Services, Assessment Tools, and topical events. Established in 1983, Forrester is headquartered in Cambridge, Mass., with North American Research Centers in San Francisco, Calif., and Toronto, Canada. Forrester's European Research Center is located in Amsterdam, Netherlands, its UK Research Centre is located in London, and its Research Center Deutschland is located in Frankfurt, Germany. Additional information about Forrester Research can be found at www.forrester.com.

Information concerning the quarterly release of the NAPM/Forrester Research Report on eBusiness may be obtained through the NAPM Web site at www.napm.org and the Forrester Research Web site at www.forrester.com.

The next release of the NAPM/Forrester Research Report on eBusiness will be in mid-October 2001.

CONTACTS:

Kristen Kioa
NAPM<
+1 800/888-6276 (or 480/752-6276), extension 3015
kkioa@ism.ws

Mariko Zapf
Forrester Research, Inc.
+1 617/613-6025
press@forrester.com

©2001, NAPM and Forrester Research, Inc. Forrester and Forrester eResearch are trademarks of Forrester Research, Inc.



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