Tài liệu E-business 2.0: Roadmap for Success - Chapter 10 doc

Chapter Ten
Chapter Ten
Demystifying
e-Procurement: Buy-
Side, Sell-Side, Net
Markets, and Trading
Exchanges

www.ebstrategy.
com
2 -
© e-Business Strategies,
Inc.
Introduction
Introduction
More than 5-10% revenues spent on non-
production goods annually
–
Office equipment, supplies, software, computers
–
Top 2000 U.S. corporations = $500 billion annually
Purchase detail for negotiating better supplier
contracts not available
–
Most POs worth less than $500
–
Large percentage of that is off contract, outside preferred
channels

www.ebstrategy.
com

3 -
© e-Business Strategies,
Inc.
Introduction
Introduction
B2B transactions comprise significant market
–
Several trillion dollars
–
Big Three automakers do $500 billion/yr worth transactions
related to buying and selling car components
–
Non-discretionary spending, required for business
–
Both buyers and seller see importance of an efficient
marketplace, to streamline processes and reduce costs

www.ebstrategy.
com
4 -
© e-Business Strategies,
Inc.
Introduction
Introduction
Procurement not just support function; a valuable weapon
–
Lower procurement costs, reduce order-cycle times and ensure
smooth delivery of materials
B2B strategies now a top mgmt focus
–

Not so much a technological revolution as a business revolution
enabled by technology
–
Driven by CEO or CFO, reflecting management’s awareness of
key challenges facing corporate procurement functions
•
Reducing order-processing cost and cycle times
•
Providing enterprise-wide access to corporate procurement
capabilities
•
Empowering desktop requisitioning through employee self-
service
•
Achieving procurement s/w integration with back office
systems
•
Elevating procurement function to strategic importance within
organization
–
Dollar-for-dollar bottomline impact of e-procurement is startling

www.ebstrategy.
com
5 -
© e-Business Strategies,
Inc.
Introduction
Introduction
B2B strategies now a top mgmt focus

–
Driven by CEO or CFO, reflecting management’s
awareness of key challenges facing corporate procurement
functions
•
Reducing order-processing cost and cycle times
•
Providing enterprise-wide access to corporate
procurement capabilities
•
Empowering desktop requisitioning through employee
self-service
•
Achieving procurement s/w integration with back office
systems
•
Elevating procurement function to strategic importance
within organization
–
Dollar-for-dollar bottomline impact of e-procurement is
startling

www.ebstrategy.
com
6 -
© e-Business Strategies,
Inc.
Evolution of e-Procurement Models
Evolution of e-Procurement Models
Industry

Consortiums
Industry
Consortiums
Third-Gen
Trading
Xchanges
Third-Gen
Trading
Xchanges
Second-Gen
Trading
Xchanges
Second-Gen
Trading
Xchanges
First-Gen
Trading
Xchanges
First-Gen
Trading
Xchanges
Corporate
Procurement
Portals
Corporate
Procurement
Portals
B2E
Requisition
Apps

B2E
Requisition
Apps
EDI
EDI

www.ebstrategy.
com
7 -
© e-Business Strategies,
Inc.
Pre-Internet Era: EDI Networks
Pre-Internet Era: EDI Networks
Private and limited to large businesses
–
Linked with major suppliers
–
Require large capital outlays
Automate procurement process; support
automatic inventory replenishment; and tighten
the relationship between buyers and primary
suppliers
Perform best in strategic partnerships,
specialized relationships, and rigid performance
contracts
–
Don’t do well in open sourcing and flexible supply
chain world

www.ebstrategy.

com
8 -
© e-Business Strategies,
Inc.
B2E: Purchasing and Requisitioning Apps
B2E: Purchasing and Requisitioning Apps
Next gen procurement apps taking hold in corporations
–
Purchase of goods and services the single largest cost item
–
For $1 earned on sale of product, $0.50-$0.60 spent on goods
and services
–
Inefficient procurement practices wasting billions of dollars
Desktop requisitioning enables employees to purchase
products and services online
–
Hook up corporate intranet to suppliers’ Web-based
commerce sites to eliminate paper-intense and costly
purchasing process of traditional business
Consolidating purchasing process with few key
suppliers capable of providing volume discounts can
generate tremendous cost savings
–
Ford

www.ebstrategy.
com
9 -
© e-Business Strategies,

Inc.
Corporate Procurement Portals
Corporate Procurement Portals
For buying both prodn and non-
prodn related goods
Procurement portals do more
than basic purchasing
–
Purchasing: the buying of
materials and all activities
related to the buying process
–
Procurement: includes
requisitioning, purchasing,
transportation, warehousing
and in-bound receiving
processes
Early strategies reengineered,
even dismantled hierarchical
structures
Recent strategies restructure
entire order-to-delivery process

www.ebstrategy.
com
10 -
© e-Business Strategies,
Inc.
Trading Exchanges – First Gen
Trading Exchanges – First Gen

Communities, Store Fronts, & RFP/RFQ Facilitators
Information and content hubs
–
Content communities attracting purchasing professionals
–
Revenue: Advertisement, Subscription
–
VerticalNet
RFP and RFQ facilitator exchanges
–
Centralized online marketplace with preapproved group of
suppliers
–
Fixed-price, sealed bids
–
Revenue: subscription fees, fees for bids to be read,
transaction fees for bids submitted and/or successfully chosen
–
WellBid in the energy sector

www.ebstrategy.
com
11 -
© e-Business Strategies,
Inc.
Trading Exchanges – Second Gen
Trading Exchanges – Second Gen
Virtual Distributors and Auction Hubs
First gen trading hubs: “an inch deep and a mile wide”
Transaction necessary for success

Revenue: from every transaction within the exchange
Virtual Distributors
–
One-stop shopping for buyers and sellers
–
Product information from multiple catalogs, multiple suppliers
and manufacturers into a megacatalog
–
Do not carry inventory or distribute products; assist buyers in
arranging for 3rd party carriers to transport other goods
–
Streamline sourcing of direct goods by issuing a single PO
and then parsing the order to each relevant supplier
–
SciQuest in life-sciences industry

www.ebstrategy.
com
12 -
© e-Business Strategies,
Inc.
Trading Exchanges – Second Gen
Trading Exchanges – Second Gen
Auction Hubs
–
Sales channel for spot buying unique items; used
equipment, surplus inventory, perishable goods
–
Similar to stock market
–

Buyers and sellers meet anonymously to agree on
prices on commodities
–
Driven by either sellers (AdAuction.com) or buyers
(FreeMarkets.com)
–
Forward auctions allow several buyers to bid for
products/services from an individual seller
–
Reverse auctions allow several prequalified sellers
to bid for fulfilling an individual buyer’s need

www.ebstrategy.
com
13 -
© e-Business Strategies,
Inc.
Trading Exchanges – Third Gen
Trading Exchanges – Third Gen
Collaboration hubs
Provide more than transaction functionality, help
with end-to-end mgmt of supply chains
Create common platform for all participants in an
industry supply chain
–
Share information; conduct business transactions;
collaborate on strategic and operational planning

www.ebstrategy.
com

14 -
© e-Business Strategies,
Inc.
Trading Exchanges – Third Gen
Trading Exchanges – Third Gen
Provide value-added services
–
Increase site “stickiness”; generate multiple revenue streams;
increase competitive barriers to entry
–
Bidcom is a single online workplace for large contractors to
collaborate with architects, store blueprints, expedite permit
process and purchase building materials
–
Integrated commerce technology
•
Automate transaction processing, incorporate static pricing
and/or dynamic pricing
–
Brokering services
•
Logistic and financial services
–
Service and support
•
Customer service support, returns processing, and
warranty coverage

www.ebstrategy.
com

15 -
© e-Business Strategies,
Inc.
Industry Consortiums: Joint-Venture
Industry Consortiums: Joint-Venture
Procurement Hubs
Procurement Hubs
Larger firms responding to competitive threat
posed by new startups
–
Forming either buyers or suppliers consortium
–
Traditional industry leaders have two advantages
over startups: instant commercial activity and
liquidity
Buyer consortium
–
Groups of large companies combining buying
power to drive down prices
–
Covisint