CNF Eyes "On-demand" e-Procurement

Selects IBM and Ketera to take purchasing processes online with hosted solution

New Orleans, LA  February 21, 2003  Freight carrying conglomerate CNF this week tapped a spend management solution from Ketera and IBM as the company moves its purchasing processes online.

CNF, a $4.8 billion enterprise based in Palo Alto, Calif., offers a range of supply chain services, including less-than-truckload (LTL), air freight and ocean services, and logistics management, through operating companies that include Con-Way Transportation Services and Menlo Worldwide.

The company will begin working immediately with the two solution providers to move its purchasing processes to Internet-based systems, with the goal of automating the buying cycle from requisition through payment stages.

Ketera, an American Express-based venture formerly called MarketMile (see related story), will provide software for the implementation, while IBM will offer hosting services. By adopting the providers' hosted model, which they call "on-demand procurement services," CNF expects to be up and running on the Ketera procurement solution in just 45 days.

"We recognized an opportunity to enhance our purchasing process with state-of-the-art technology," said Mitch Plaat, director of contract services at CNF. "On demand procurement made the most sense to CNF. The flexible, affordable service allows us to achieve savings rapidly without the up-front investment and ongoing resource commitment associated with the implementation of enterprise software."

Key aspects of today's agreement include transitioning purchasing across the organization to the Internet-based systems, moving to an automated payment and reconciliation process through use of the American Express Corporate Purchasing Card solution, and offering procurement as a shared service to Con-Way Transportation Services and Menlo Worldwide. More than 1,000 users will be using the service after just 90 days.

The implementation will also involve enabling core suppliers of maintenance, repair and operation (MRO) materials, office supplies, materials handling products and print services. Ten suppliers are to be enabled in the first 90 days.

In addition, CNF is set to use Ketera's Spend Analysis software to provide an upfront understanding of CNF's corporate spending, to identify opportunities for controlling and reducing costs and to identify priorities for supplier enablement.

Ruby Sahiwal, chief operating officer for Ketera Technologies, hailed CNF's decision to adopt the "on-demand" procurement services model, which he described as "the way of the future." Sahiwal added, "Just as payroll processing and IT management have become on-demand services, so too will spend management and procurement."