Procurement Savings Can Be Significant
Jesse Berst offers a few explanations as to why many software developers prefer to avoid developing systems to meet corporate purchasing requirements:
- Two by Two: Purchasing has resisted automation thus far because two clients are involved, the employee who needs the supplies and the buyer, the person authorized to make the purchase. Furthermore, purchasing has two aspects, the purchasing (i.e., the placement of the order), and the procurement (i.e., requisitions, approvals, purchase orders, accounting, etc.). Four agents are involved, not two as in most early systems.
- Side Buy Side: Suppliers sell products by distancing themselves from the pack. They need their products and pricing that distinguishes them from their competitors. How then, do they prevent their catalogs from getting pulled into enormous, consolidated catalogs where they lose their distinction? Furthermore, how can they maintain control of not just content but form? The buyers, however, don''t want to master the fine art of keyword searches just to find the best price for a widget. How do you balance these two competing needs?
- Step by Step: Slowly, companies such as Ariba Software are developing procurement systems to tackle the hefty problem of automating the procurement process. Their system integrates the procurement process by electronically processing an order and interfacing it with back office systems (e.g., accounting). Berst feels that although electronic procurement is harder than it sounds, neglected buyers will soon see their day.
Ariba Software has recently incorporating cXML into their procurement software, the Ariba Operating Resource Management System (Ariba ORMS). They''re beginning pilot testing with cXML in March 99. With the recent development of cXML, currently being spearheaded by Ariba, it seems that day is right around the corner!
