A
Summary of the 2010
Purchasing Card
Benchmark Survey
Results
Richard
Palmer and Mahendra
Gupta, RPMG Research
Corporation
Survey
Overview
The
2010 Purchasing Card
Benchmark Survey
Results (the
“Report”) provide a
comprehensive
analysis of the
purchasing card
market including
trends, benchmark
data, and variables
that factor into
program
success.
Survey
Respondents
The
Report is based on
over 1,900 responses
from purchasing card
end-users
representing public
and private
corporations, state
and federal
government, city and
county government,
public and private
universities and
colleges, school
districts, and more.
All market sizes -
middle, large, and
Fortune 500 size -
are represented in
the Report. The age
of respondents’ card
programs vary from
less than one year
old to 15 or more
years.
Purchasing
Card Spend in North
America
Between
2007 (the previous
RPMG Research report
year) and 2009,
purchasing card
spending in North
America grew from
$137 billion to $161
billion.
Corporate purchasing
card spending growth
in the past two
years (14.9%) was
lower than the
Government and
Not-for-Profit
segment
(20.5%).
Within the Corporate
segment, Fortune 500
Size company
purchasing card
spending growth over
the past two years
was lowest (at
9.1%). Large
Market and Middle
Market corporations
reported 22.9% and
44.3% growth,
respectively.
Among Government and
Not-for-Profit
entities, purchasing
card spending growth
over the past two
years was lowest
among Federal
Government agencies
(at 7.0%) and State
agencies (10.3%),
but notably higher
among Cities and
Counties (22.9%),
Universities
(20.2%), School
Districts (26.7%),
and Not-for-Profit
organizations
(24.7%).
Between 2007
and 2009,
organizational
purchasing card
spending increases
were driven
primarily by
increased card
distribution
throughout the
organization,
increase in the
amount spent per
transaction, and the
increased use of
electronic Accounts
Payable card
accounts
(non-plastic card
accounts used to pay
for invoiced goods
and services).
Key growth
categories for
purchasing card
usage include:
transportation and
delivery services,
media and
advertising
services, print and
duplicating
services, and
telecommunication
services. In
addition, the
traditional spend
categories of office
equipment, computer
hardware, software
and peripherals, and
MRO goods continue
to be common targets
of purchasing
spending.
Going
forward, the
predicted purchasing
card growth is 9.1%
for through 2010 and
a 12% per year
average over the
next five
years. Annual
purchasing card
spending is expected
to increase to $176
billion in 2010,
$213 billion by
2012, and $255
billion by
2014. In
contrast to the past
two years, Corporate
respondents project
an annual average
purchasing card
spending growth rate
over the next five
years (13.6%) that
is higher than that
projected by
Government and
Not-for-Profit
respondents
(10.6%).
New
Insights
As
in five previous
studies since 1998,
this edition of the
RPMG Purchasing Card
Benchmark Survey
Results examines
best practices of
\\\"high
performance\\\"
purchasing card
programs and sheds
light on continuing
market trends,
including card
program management
and control
practices. The 2010
edition provides
unique and fresh
insight into
emerging topics such
as the use and
spending patterns
associated with both
“ghost” and
Electronic Accounts
Payable card
accounts, the use of
purchasing cards
outside of North
America, the impact
of integrating
purchasing data into
organizational
databases, the use
of card program
assessment and
optimization
techniques, and
supplier
relationship issues.
Finally, the Report
offers many
innovative
suggestions from
end-users on topics
ranging from program
management to
technology.
Organizational
Impact
The
average
administrative cost
(including sourcing,
purchasing, and
payment activities)
of a traditional
Purchase Order-based
process was reported
to be about $93. For
purchasing card
transactions, the
cost to procure and
pay for goods was
reported around $22.
Thus, purchasing
cards generated
administrative cost
savings of
about $71 per
transaction when
compared to
traditional PO
payment
methods. This
translates into a
transactional cost
savings of more than
$38 billion within
North America on an
annual basis.
Further, in
comparison to a
traditional PO
process, purchasing
cards reduce the
procurement cycle
time by
approximately 12
days, reduce the
number of suppliers
managed in Accounts
Payable (AP)
databases by an
average of 16%, and
generally result in
a reduction or
redeployment of
staff in AP and
Procurement
functions.
Twenty-six percent
of all organizations
report the use of
purchasing card data
to obtain a higher
discount for goods
or services. In
terms of supplier
relations, 49% of
all organizations
indicate that, over
the past five years,
suppliers who accept
purchasing cards
have increased their
share of business
with their
organization above
that of suppliers
not accepting
purchasing cards.
Benchmark
Averages
Benchmarking
data within the
Report covers a
variety of program
outputs for
end-users to compare
their own programs
to. For all
respondents
combined, key
averages are:
•
Monthly spend per
organization: $1.8
million
•
Transaction size:
$315
•
Monthly spend per
card:
$2,062
•
Number of
transactions per
card per month:
7
More
importantly, the
Report provides
benchmark purchasing
card program
statistics by size
of business, type of
governmental unit,
and industry
category. To
purchase the
complete report, go
to
www.rpmgresearch.net.
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