Lacking Integration

Survey reveals Fortune 1000 Companies lack true e-commerce integration

TORONTO, CANADA -- December 4, 2000 released survey results on the current penetration of Web-based order management systems among U.S.-based Fortune 1000 companies.  The October 2000 survey was developed by ProCure and conducted in conjunction with Leflein Associates, an independent market research firm.  The company surveyed top executives from 200 of the U.S.'s largest manufacturers, retailers and wholesalers.

Survey participants confirmed that a significant portion of today's businesses still process the bulk of their orders through traditional, manual processes such as phone- (89 percent), fax- (93 percent) and paper-based (69 percent) methods, despite the availability of Web-based order management solutions. These traditional methods account for almost three-quarters (73 percent) of all orders received.

Over the past year, there has been a huge adoption rate of the Ariba and Commerce One platforms within the business community, said Neil Barran, president, Inc. The reality is that very few of these organizations have their suppliers integrated to these applications. In order for businesses to achieve maximum results from these platforms, aggregating and integrating buy-side and sell-side processes within the supply chain is critical.

Survey results indicate the existence of multiple integration barriers, which include time and cost considerations, as well as a lack of supplier-centric solutions, resulting in this critical shortage of true end-to-end integration in the market.

Suppliers Facing Multiple Integration Barriers

The most significant considerations survey participants identified as critical integration barriers included cost (63 percent) and time (52 percent), as well as disruption to current business activities (39 percent).  Other key issues that were identified as severely impeding a supplier's entry into the digital marketplace were the multitude of e-commerce standards that suppliers must adhere to in order to launch an online order management system and a shortage of viable, supplier-centric solutions.

A majority of suppliers are missing out on opportunities to realize cost savings and consequently, so are their customers, said Barran.  The Internet has created an unprecedented opportunity in the marketplace for suppliers to participate in an unlimited number of online sales channels. Buyers need to get suppliers integrated to their procurement applications in order to demonstrate true liquidity and justify the huge investments that have been made in these platforms. Yet, suppliers simply can't cope with the numerous integration challenges they're expected to manage autonomously.  What's needed is a cost-efficient, unique solution that bridges the gap between the buyer's expectations and the supplier's capabilities.

Survey results indicate that even in those companies that have successfully implemented Electronic Data Interchange (EDI), -which allows business data to be communicated electronically, a vast majority (70 percent) reported they are still not able to process an order without some form of human intervention along the order lifecycle.

Automating order procurement and fulfillment tasks can provide tremendous savings for any organization, adds Barran, but until large businesses can provide their trading partners with the tools to cost-effectively integrate and aggregate their orders into their procurement applications, true liquidity cannot be achieved.

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