Global Enabled Supply Chain: e-Procurement

[From iSource Business, November 2001] e-Procurement, perhaps more than any other category of software on the market, represents the volatility of the B2B space over the last year. At the heels of the dot-com revolution, e-procurement software exploded onto the scene, posting 191 percent revenue growth over 1999. Yet, less than two years later, this niche of software appears to have fallen prey to the dangerous pace and unguarded enthusiasm of the e-eager economy.

The long story short, the functionalities of e-procurement applications, namely automated requisitioning, have been commoditized amidst rapidly advancing technology and the introduction of newer, more broad-based products. (If the Internet revolution has taught us nothing else, it has taught us that the most advanced software systems of today likely will be antiquated by the time they are installed on your home or company computer.) In addition, the e-procurement market has had to struggle against a growing frustration among early adopters due to implementation and profitability issues. Together, these things have made e-procurement software a dying breed.

The Trough of Disillusionment

The rise and fall of the e-procurement reign is based on drastically shifting market conditions. According to a recent study by Gartner Research, the e-procurement market today is heading quickly for what it terms the trough of disillusionment, a dip in consumer confidence that is scheduled to reach its lowest point by the middle of 2002.

Many factors have contributed to this disillusionment' among buyers, but chief among them is e-procurement's once robust, but now relatively limited, functionalities. E-Procurement applications have been criticized for their ability to support only certain subsets of product purchasing, primarily white-collar indirect spending on such items as office supplies. Over the last 18 months, enterprises have changed their e-business focus to encompass the more strategic, direct purchasing of