TEMPE, ARIZ.—Most companies have only begun to use the Internet for their procurement activities, and only about a quarter report cost savings so far.

A recent study of purchasing and supply chain executives at 368 firms found that momentum is building to use the Internet to collaborate with and find new suppliers, however. In most areas, the National Assn. of Purchasing Management and Forrester Research, which conducted the study, found that larger organizations that purchase more than $100 million in goods and services a year are doing more online than their smaller counterparts.

Highlights of the report:

• Most organizations are in the early stages of online purchasing. Less than seven percent of the responding companies reported being more than 40 percent of the way toward full adoption. Large-dollar buyers are further along compared with smaller dollar-volume purchasers (11 percent versus three percent).
• Nearly nine of 10 firms see the Internet as important for procurement during the next 10 months. Large-dollar buyers often have higher expectations, seeing the Internet as either very important or critical (51 percent versus one-third of smaller firms).
• Few organizations have seen cost savings from buying online so far. Only 27 percent of companies reported cost savings, more often at large firms (33 percent versus 22 percent).
• Eight of 10 firms use the Internet to identify new suppliers, and half collaborate with suppliers online.
• Most firms are often dissatisfied with suppliers' online capabilities. Only nine percent viewed their preferred suppliers' online capabilities as very good or excellent, while 38 percent rated those as very bad or poor.
• Most end users buy some indirect materials online. Some 61 percent bought indirect materials online during the past three months, and large buyers used the Internet more often than smaller organizations (68 percent versus 57 percent).
• Only 19 percent bought goods or services through online marketplaces. Large buyers use them only slightly more than smaller-volume buyers (20 to 18 percent), but their adoption momentum is twice as big.
• Nearly half used the Internet for RFPs, and only 16 percent bought products or services through an online auction.