Major vendors, including PeopleSoft, Sun Microsystems, Netscape Communications, and Oracle have jumped into the e-procurement game, courting businesses seeking online buying's promise of cost savings and more efficient supply chains.
Behind the move to e-procurement is an understanding that if this business-to-business step goes well these same efficiencies can be applied to trading exchanges, according to industry analysts and observers.
"[There is a] tremendous amount of interest in e-procurement among businesses," said Kip Martin, an analyst at Meta Group.
Martin said e-procurement is the natural outcome of a progression of an e-business strategy that usually starts with CRM (customer relationship management). Major companies are finding that e-procurement "has a direct, defensible correlation between technology and business benefits", he said.
The bandwagon for e-procurement suppliers filled up recently with Sun, Netscape, and Andersen Consulting launching a joint Internet procurement venture, as PeopleSoft upgraded its eProcurement package and heralded the launch of its own trading exchange. Additionally, Oracle introduced Oracle Internet Procurement 11i.
The unnamed Sun/Andersen exchange will give businesses an option to outsource run-of-the-mill purchases of office supplies, furniture, and other "indirect" materials, according to its backers.
Not far behind, PeopleSoft will be launching PeopleSoft MarketPlace trading exchange in three months, the result of its recent agreement with Commerce One.
The PeopleSoft MarketPlace will serve as a new link between buyers and suppliers, said John Webb, vice president of product management for supply-chain products at PeopleSoft. The XML-based PeopleSoft eProcurement automated procurement package also offers a connection to Commerce One's MarketSite.
"It's our own trading exchange - PeopleSoft will be hosting it," Webb said.
A link to PeopleSoft MarketPlace will come with an upgrade of eProcurement, now in Version 2.0. The eProcurement software will give users access to MarketSite and MarketPlace for finding suppliers, Webb said. As for how users will make use of this access, "A lot depends on what type of supplier they want to work with", he said.
In addition, the eProcurement package will let companies establish the rules needed for governing how employees handle their own requisitions, Webb said. The constraints would likely come from an ERP (enterprise resource planning) platform level.
Oracle officials have stressed the self-service purchasing aspects and the purchasing costs savings of its Internet Procurement 11i.
"We're fulfilling it in a b-to-c [business-to-consumer] way," said Vance Checketts, a senior director for Internet procurement and Oracle Exchange at Oracle. In that scenario, companies can deploy Internet Procurement and require their employees to check to see whether the goods they are searching for are already available in-house and may even be slated for auction.
In the future, vendors will not be competing based on technology but will "have to be more aligned with business benefits", Meta Group's Martin said.
Major players tout their options for fuelling e-procurement for business.
* PeopleSoft: Upgraded eProcurement package, set to launch own trading exchange.
* Sun Microsystems, Netscape, Andersen: Started joint venture for outsourcing basic office-supply purchases such as furniture.
* Oracle: Detailed Internet Procurement 11i, stressing its "self purchasing" feature.