Take Control Now

In a few years, e-procurement may have so permeated society that your office will be reverse-auctioning filters for the Mr. Coffee. But that doesn't mean every company will be an e-procurement winner


GOBOSH. It stands for go big or stay home, and it's the approach you should take to e-procurement. Not big as in bloated and expensive, but big as in the absolute best system you can pull off. This might mean a total reworking of your current procurement system, a minor tweak or anything in between.

The Internet revolution is often compared to the Industrial Revolution. Both upended the business world, but the Industrial Revolution took years to accomplish its change. Now, cycle time (the time from invention to implementation) is often days instead of months, and the business model you've agonized over for countless hours is obsolete before the first rough draft is out of the laser printer.

That's why it's important to GOBOSH in your e-procurement. Not every company will be an e-procurement winner. Some will merely be pretenders, still trying to convince their employees to renounce the dead tree editions of suppliers' catalogs. How can you be sure that your company is an e-procurement champ? Well, you could buy out all your competitors, but that's a little Machiavellian, and there are all those messy antitrust issues to deal with. So it might be better to do some data capturing and general business recon beforehand. To help you do that, we compiled 10 axioms that you can bet your venture capital on.

Axiom 1
Remember that nothing has really changedThis might seem like a contradictory statement from an e-procurement magazine, but hear me out. A sage from centuries ago once said, There is nothing new under the sun, and he was right. Technology, terminology and methods of payment change, but the basic human endeavors of buying, selling, speaking and existing are, at their core, everlasting. So while e-procurement is a quantum leap in the way things get done, the same old things are still being done. True, every now and then, something that appears brand new pops up, but it usually either dies away or is exposed to be nothing more than a new version of an old concept. Ridiculously over-valued dot coms, for example. Companies that actually didn't want to post a profit appeared to be a new concept, but they were soon shown to be nothing but a dumb idea, and dumb ideas date back to the IPO of the apple in the Garden of Eden.

Vincent Chimienti, vice president of procurement for New York-based WPP Group USA, puts it this way. I think that there is probably nothing new other than some technical capability on the part of both ourselves and our suppliers. There is nothing that I would say is different in the world of e-procurement than there ever has been... The same caveats, the same things that we looked for then, we're looking for now. eProcurement is not a cure-all, a magic wand or even a neat card trick. It's a tool. A tool that must be used to provide customer service, needed products, services and convenience, just like businesses have always had to provide.

Axiom 2
Get started
Again, this is a seemingly strange statement. Isn't everybody already e-procuring his or her corporate rear off? Not quite. The hypemeisters would lead you to think otherwise, but this is a technology that is still in its nascent stage.

Paul O'Malley, e-procurement product manager for Key Next, Key Bank's B2B e-commerce unit says, We've seen the figures from Forrester and Gartner and others that forecast trillions and trillions of dollars to be spent in B2B transactions by the year 2003 or 2004, and we think that's pretty good news. The interesting thought is that those volumes represent only about 12 percent of total B2B commerce, both electronic and manual.

Sure, 12 percent is a sizable figure when you consider the total amount of goods being bought and sold, but that still leaves an undersold mound of businesses that aren't e-enabled. The e-business world has started believing its own press releases, always a dangerous practice. Statistically, most people reading this either aren't using e-procurement, or they aren't using it as much as they could be.

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