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ISM/Forrester Research Announce Results Of Latest Report on eBusiness

Online Purchasing Activity Jumped Up In Q4

FOR IMMEDIATE RELEASE

CONTACTS:

Kristen Kioa	Mariko Zapf
ISM	Forrester Research, Inc.
+1 800/888-6276, extension 3015	+1 617/613-6225
kkioa@ism.ws	press@forrester.com

TEMPE, Ariz., and CAMBRIDGE, Mass., January 15, 2003 . . . The Institute for Supply Management™ (ISM) and Forrester Research, Inc. (Nasdaq: FORR) announce the release of the ninth ISM/Forrester Research Report on eBusiness, a first-of-its-kind report that tracks online activity for both manufacturing and non-manufacturing organizations. The primary finding in the latest Report is that purchasing organizations stepped up their online activities during this past quarter. Every segment reported an increase in the use of the Internet for buying both indirect and direct materials. As a result, the average percentage of indirect materials purchased online rose 1.5 percent to 10.5 percent, while the average percentage of direct materials purchased on the Internet shot up 2.9 percent to 9.4 percent.

"Over this past quarter, we have seen significant increases in most of the major areas covered by this report. However, there are still a lot of budgetary concerns as well as issues dealing with connectivity and return on investment," said Edith Kelly-Green, spokesperson for ISM and vice president and chief sourcing officer for FedEx. "One respondent commented that 'It is difficult to integrate with current systems, and has limited value at present time,' while another noted that 'We have stopped attempting to implement an enterprisewide eProcurement solution at this time because the ROI is not there for us.'"

"Not only did buyers use more online auctions and eProcurement tools, but larger organizations reported better cost-savings results from these efforts. It will be interesting to see if this online buying surge continues into 2003," said Bruce Temkin, principal analyst at Forrester.

The most dramatic increase was with large buying organizations, where the number using the Internet for direct materials jumped by more than 14 percent. Buyers also reported significant increases in the use of online auctions, from 18.8 percent in Q3 to 27.2 percent in Q4. Use of enterprisewide procurement tools rose from 35.9 percent in Q3 to 42.6 percent in Q4.

For the Report on eBusiness, ISM 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 on direct and indirect materials per year with those that purchase less than $100 million per year. To track the adoption of different activities over time, ISM and Forrester created the eBusiness Adoption Momentum (eBAM) index.

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

About ISM

The Institute for Supply Management™, established in 1915, is the world's leading educator of supply management professionals and is a valuable resource for decision makers in major markets, companies, and government.

ISM has provided a rich history of economic data for over 67 years on the U.S. economy with its Manufacturing ISM Report On Business® and the PMI. Since June 1997, ISM has also been publishing the Non-Manufacturing ISM Report On Business®. Both surveys can be found at www.ism.ws.

About Forrester Research, Inc.

Forrester Research identifies and analyzes emerging trends in technology and their impact on business. Forrester's WholeView™ Research, Strategic Services, and Events help $1 billion-plus clients understand how technology change affects their customers, strategy, and technology investment. Established in 1983, Forrester is headquartered in Cambridge, Mass. For additional information, visit www.forrester.com.

Information concerning the quarterly release of the ISM/Forrester Research Report on eBusiness may be obtained via the ISM Web site at www.ism.ws and the Forrester Research Web site at www.forrester.com under "Press Releases."

The next release of the ISM/Forrester Research Report on eBusiness will be April 15, 2003.

ISM/Forrester Research Report on eBusiness

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