| Procurement systems were a
pioneering component of the B2B market. Vendors and
suppliers in this market saw immediate advantage in being
able to share information about products and services that
others needed for their own internal needs. An obvious
problem for many organizations, both commercial and
government, was (and remains) the cost of procurement. The
clear benefits of B2B systems include avoiding the
creation of complex approval cycles for insignificant
items. The paperwork required for small office supplies,
for example. can cost more than the items themselves.
While this benefit is significant,
automating and enforcing business rides for the purchase
of a wide range of systems became the focus for
procurement. E-business applications that depended largely
on suppliers realized some huge benefits including:
1. Reduced costs of items in the
procurement market.
2. Improved availability.
3. Ability, to reduce inventor, for buyers.
4. Controlled procurement processes.
5. Ability to control quality standards more effectively.
6. Improved cash management.
7. Supplier control expansion and improvement.
These systems now form the heart of many
supply chain environments. Most of their functions are now
accessed across the Internet directly into the supplier's
organization. Some are through links and others are a
sublicensed component of the digital market itself. For
example, Staples and Travelocity.com are suppliers of
digital procurement services that businesses can use
through on-line ordering. By. moving one step further, it
is possible to offer a customized catalog, with prices
(and discounts) reflected for each of the companies in the
program. The large procurement systems - such as those
used by the State of California to improve their
e-government initiatives- are often the ones that steal
the headlines. However, the market is expanding, with
simple applications that meet many e-business
requirements. Examples of B2B procurement solutions
include:
1. Corporate travel: on-line travel
agency.
2. Hardware and software acquisition: hardware and
software supplier with configuration control.
3. Payroll and 401k: online payroll services, retirement
management services.
4. Banking: on-line banking and accounting services.
5. Shipping: on-line shipping services.
These are all simple e-business market
services. Although straight forward, many of these
services were too expensive to offer when most of the work
required considerable human effort. However. once the
business rules are electronically applied, a self-service
approach made the offering efficient and affordable.
The range of these services will expand
dramatically over the course of the next few months.
Companies such as CitiCorp are trying to become
one-stop-shopping locations for e-Business applications.
By combining payroll, shipping, office equipment, credit
services, travel, e-commerce, and investment and insurance
services, a wide range of business functions can be
centralized around a single procurement system. More
organizations will start to understand the value of these
services, and alliances will occur making it easier for
buyers to comparison shop for these services.
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