E-procurement guinea pigs fret over security and cost

A study into government e-procurement has found concerns over security and integration risks must be addressed before agencies jump on the e-commerce bandwagon.

The study, which names individual vendors, was conducted by the Australian Government Information Management Office and examines value propositions and outcomes of four government e-procurement trials.

The lucky participants were the Australian Broadcasting Corporation (ABC), Australian Antarctic Division (AAD), Special Broadcasting Service and the Commonwealth Scientific and Industrial Research Organization.

While concluding that e-procurement increases efficiency within the government's gargantuan purchasing power, the study also found agencies are not prepared to take at face value vendor promises about security or integration costs.

Particular concerns were raised by SBS which found external B2B connectivity a sticking point. The broadcaster tested a Web-based system for creating and approving electronic catalogue requisitions through an Oracle iProcurement module, delivered as an upgrade to SBS's existing Oracle Financials 11i system.

"SBS also explored the potential for B2B connectivity between the Oracle Exchange and suppliers. The Oracle Exchange system was successfully tested and configured for this purpose. Technical and security constraints meant this portion of the trial was limited to the Oracle test environment.

"SBS experienced issues with security constraints when trying to implement direct B2B connectivity with suppliers. The core SBS internal network is used to support the transmission of digital radio and television signals, which means it is vital to protect the network from any failure or security breach.

These security requirements took priority over the e-procurement needs, so external suppliers could not access the Oracle system to receive and send [purchase orders] and invoices," SBS' contribution to the study states.

Computerworld has contacted Oracle for comment but had received no reply by publishing deadline.

The ABC was also playing it safe on the B2B front, choosing the safe harbour of an externally hosted mySAP Enterprise Buyer Professional module rather than risk experimenting with its core SAP R/3 system.

While the externally-hosted SAP trial went well, with the ABC now scoping out an enterprise-wide e-procurement solution, Aunty reserved judgement on how costs of a fully integrated SAP B2B system should add up.

"Overall, the ABC was pleased with the success of the trial and the future potential of e-procurement within the Corporation...Actual implementation details may differ from the trial depending on the business case justification in that some components may be run in-house rather than hosted externally," the ABC stated.

Government IT enforcer and Special Minister of State Eric Abetz stressed the need for agencies to get maximum value from their e-procurement programs - and the vendors delivering them.

"When implemented well, e-procurement delivers transparent, well controlled and documented procurement processes...which is very valuable information for managing a government agency's total spend," Abetz said.

The case studies are available at www.agimo.gov.au

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More about ABC NetworksABC NetworksAustralian Antarctic DivisionCommonwealth Scientific and Industrial Research OrganizationEnterprise BuyerOracleSAP AustraliaSBS

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