New York June 13, 2001 U.S. companies seeking to expand their e-procurement and e-commerce initiatives outside the United States appear to be taking their corporate purchasing cards with them as they go global with their electronic purchasing initiatives, according to a report this week from American Express.
The credit and purchasing card giant says that growth in international B2B e-commerce has prompted the company to enhance its corporate purchasing card and e-payments services to keep up with its clients' global expansion.
Despite recent grim headlines in the B2B technology sector, American Express asserts that many large companies are already seeing good results from online purchasing programs in the United States and are starting to expand these programs overseas. In fact, AmEx says that economic pressure to reduce corporate operating expenses has fueled renewed interest in achieving a faster return on investment from e-purchasing software implemented in the past 12 months, prompting the credit card company to enhance its offerings.
For example, DuPont implemented Ariba's procurement software last year to automate its purchasing and drive down the cost of transactions, leveraging existing relationships with vendors. To speed the ramp-up of online purchases, DuPont 's U.S. implementation focused on suppliers that were already enrolled in the enhanced data capture program for American Express' corporate purchasing card. The company is now ready to expand its e-procurement program on the Ariba platform to businesses in the Asia Pacific and in Europe, looking for potential opportunities to take advantage of the benefits of e-payment.
Similarly, Weyerhaeuser's "Procure to Pay" program, using Commerce One's BuySite application, already has 16 major national suppliers accepting online orders and payment through the American Express corporate purchasing card, with more than a dozen additional national suppliers in the pipeline. In a few months, Weyerhaeuser has achieved a per-week transaction rate of more than 1,200, due in part to a holistic approach encompassing the entire "procure-to-pay" cycle.
"The purchasing card is an easy way to get up and running quickly," said Weyerhaeuser e-procurement manager John Vogel in a panel discussion at the recent Commerce One eLink conference in New Orleans. "We're very pleased with how fast transactions can start flowing with the integrated corporate purchasing card as the form of payment, so we're already expanding our e-procurement program to Canada, where we use American Express' Canadian corporate purchasing card."
Accelerating Migration to E-Commerce
As more of its corporate customers and their suppliers move to transition their global procurement programs online, American Express says it has been accelerating the development of corporate e-payments services globally, building alliances with e-procurement systems suppliers and enhancing its infrastructure to support the growing e-commerce economy.
The global initiative links American Express' efforts in key markets in Europe, Asia and Latin America to provide payment solutions for billing, invoicing, authentication, authorization, payment terms, reconciliation, receivables and international payments. These efforts have included interoperability agreements with major e-procurement software, investment in developing e-procurement service providers and expansion of an online service called "International Payments."
For instance, American Express recently announced an extension into the Asia-Pacific region of its agreement with Ariba to integrate its payment and reconciliation services into Ariba's e-procurement systems, as well as a new agreement with e-procurement portal TX123 in Singapore. In the U.K., American Express is now offering a Web-based international payment service and Smart eProcurement, an e-marketplace solution.
"Both our internal and external research points to a growing interest in e-commerce outside of the US, but turning interest into real transactions will be the challenge," said Mac Schuessler, vice president for corporate e-payment services at American Express's corporate services division. "Companies recognize that without an effective payment solution, it is difficult to achieve the true connectivity between buyer and seller that makes e-commerce effective. In the U.S., we have witnessed the use of American Express payment technology with e-procurement to speed rollout and adoption. Launching global e-pay initiatives allows us to replicate these lessons worldwide."
Recent research from American Express shows European companies are catching up to US companies in their interest in using the Internet for procurement. Approximately 70 percent of finance directors at 200 U.K. and German companies report that their companies plan to take the plunge into e-purchasing in the next 12 to 18 months, according to the American Express B2B eProcurement Report, released recently in Europe. In addition, 66 percent of the U.K. companies and 85 percent of German companies surveyed believe the benefits of e-procurement outweigh the costs.