e-Procurement: From Strategy to Implementation

e-Procurement: From Strategy to Implementation
Dale Neef | 2001-05-26 00:00:00 | FT Press | 207 | E-commerce
e-Procurement is hot. And no wonder: companies are reporting that e-Procurement systems are saving them millions of dollars annually -- in some cases, billions. GE's Jack Welch claims that GE will save $10 billion dollars from e-procurement. Cisco Systems's John Chambers says it is Cisco's #1 priority. Now, there's a start-to-finish guide to implementing e-Procurement in any enterprise. Dale Neef covers it all -- from making the business case to architecting the solution, managing the risks to reaping the benefits. Neef begins with an up-to-the-minute overview of the promise of B2B e-procurement in supporting globalized, extended enterprises. He reviews the options for deploying e-Procurement, including internal solutions and e-Hubs; then identifies key issues associated with e-procurement in the enterprise. Learn how to make the business case for (or against) e-Procurement, and how to architect the optimal solution. You'll find detailed coverage of today's leading e-procurement technologies, including XML; and today's leading approaches, from ERP-based solutions to enterprise application integration. Neef covers the entire lifecycle of the e-Procurement initiative, identifying key pitfalls and areas of risk -- and proven solutions.
Reviews
This book can be divided into 3 main parts. The first 4 chapters essentially put forward the case for e-procurement with an opening chapter containing some 33 references alone!

The intermediate section ranges from main players on the market, the software landscape & architecture, models, classification schemes and government/military tendering processes. If this chunk don't win you over then I don't know what will.

Finally, the last 4 chapters deal with issues that an intrepid implementer of an e-procurement initiative should consider. Guiding principles, structures & phases, elements to productive executive workshops and the all important change management issues. Dale places great importance on change management even going so far as to quote Mark Twain. This section is quite admonitory but the author is a management consultant by trade so I guess it's quite logical for him to advise us on issues that we should be considering before getting our hands dirty. Perhaps it will earn him some business ;-)

One thing I noticed about this author is that he is very competent at is finding synonyms. For example "maverick purchasing" can also be termed "off-contract buying" or even "rogue procurement". All of which help the reader to become more fluent in the lingua france of B2B electronic trade and keeps the narrative fresh and interesting. Early on he broadly classifies goods into white-collar ORM and blue-collar MRO introducing these colorful terms in large bold print - a common characteristic of this book.

Chapter 5: "The E-Procurement Software Landscape" requires more work IMHO. The sheer fact that I found myself tabulating the main players like Commerce One & Ariba, the solution/s they offered (whether enterprise or network based), it's name and their strategic partners would tend to indicate that the author should have done so. The main diagram provided is a pie-graph showing macroscopic market detail but it just too encompassing. Don't get me wrong - the information is provided (in text format) but it's all over the shop (no pun intended). A table would have gone down well.
Chapter 6: "The Architecture of Web-Based Procurement" is fantastic. It should have come earlier. Dale breaks down the environment broadly into "one-to-many" and "many-to-many" type approaches. Another class he introduces is the "buy-side", "sell-side" and "independent portal" type offerings. He further sub-classifies the buy-sponsored focus into 'desktop' (e.g. Concur Procurement) and 'central' type offerings. He provides us with a powerful classification scheme here but I felt he could of tied examples of each type closer to said classes. One other thing that I found surprising was the fact that he only mentions the 3 main pricing models in passing (subscription fee, transaction charge & percentage of exchange fee). I though he would of elaborated on this like he did with the mentioning of vertical e-markets like the Covisint alliance (forged by the "market creators" Ford, General Motors, Daimler-Chrysler and Renault-Nissan) and the corresponding horizontal e-market offering: OrderZone.com/ (which comes compliments of W. W. Grainger). Once again the information is provided all right but I felt that a suitable table could have easily consolidated the stuff at chapter end.
Chapter 8: "Government and E-Procurement" is riveting and current. If you're in favor of lowering the cost of government (raise hands) this exploration should give you warm, tingly feelings all over. Firstly, he introduces us to how government traditionally puts out tenders, then comes the e-procurement advantage bit and finally he rounds of with the one-and-only example of Singapore's "GeBiz" portal. This is a common technique that Dale employs of teaching us about the old bad way, then introducing us to the new good way and finally topping off with a great example. Also covered at the end is military procurement, which in current times is quite poignant. Need I say any more?
Finally, concerning predictions, Dale is not afraid to stick his neck out and make a few non-obvious ones. He sees no particular model becoming *the* dominant one but rather continued coexistence of "...the buyer-sponsored enterprise model and the third-party sponsored exchange model..." and foresees "...dramatic changes in terms of focus and consolidation..." to boot. He upholds Gartner Group's forecast that each vertical will only be able to support a max of 3 players and hence foresees "consolidation of the vertical e-marketplaces" which "...has already begun." Auctions in said verticals most evolve "...toward fuller functionality or extinction." The broad distinction between direct and indirect goods will remain but "...continuing to blur" Government can help "set standards" (like XML which he praises because it "...will greatly help intersystem connectivity.") and the whole e-government thing will "...soon see significant growth." In general though, survivors "...will need to offer supply chain management expertise as opposed to simple purchasing leverage."

To summarize therefore what you will procure is 196 pages spread over 14 chapters with an average of 5 citations per chapter. 10 diagrams, 8 short case studies and about 5 graphs. Common industry terms are introduced and defined in large bold print, TLAs are kept to a minimum and the cover has some pretty trees on it!

This book is very suitable for people who do not come from a business background - like me for example ;-) After reading this hardback I certainly increased my business vocabulary and was able to "talk the talk" with the best of them. I obtained extremely useful classification schemes that greatly helped me with business model deconstruction & system analysis and became familiar with the main players on the market at the same time.

Personally I would of loved to see more on auctions and their variations, perhaps including some game theory - but perhaps that's just wishful thinking!

Quote of the book though, definitely has to go to the chap deep inside an e-procurement project who shrewdly observed: "I like the supplier savings here, but I don't plan to be one of the transactional savings."

Blue collar MRO anyone? :-)
Reviews
eProcurement is an excellent book for the basic fundamentals of of eprocurement (eprocurement 101). We are the authors of a more advanced version for purchasing professionals already using some form of epurchasing. Our book is titled ePurchasingPlus and has input from over 30 experts and practitioners from US, UK & Canada that use ePurchasingPlus products and concepts. We recommend both books for the purchasing professional to find about the future of our profession.
Reviews
Mr. Neef did an excellent job with this book. It is not a down and dirty technical book that describes the inner workings of an e-procurement system. Then again, I think that is why I like it so much. After reading this book I feel I know the business behind e-procurement and that is THE most important issue when it comes to any system.

As a result of reading this book I have a better understanding of what e-procurement is all about. I also feel I have gained an appreciation for the different types of systems as well as where the entire e-procurement market is headed. He discussed the importance of things such as Decision Support and Business Intelligence. He supported most, if not all, of his points with solid research.

I am an systems engineer and not a business person. I got a lot out of this book. I would recommend it to both members technical groups as well as business people. The technical person will gain an appreciation for the business aspects of e-procurement. While the manager/business person will be given good direction and insights into e-procurement. I would imagine this to be of benefit to anyone whose organization is contemplating e-procurement or just some one generally interested in the area. This is even a good read for the manager who is not currently involved with e-procurement. It may show you how much you DO need it.

KUDOS to Dale Neef.
Reviews
I am a professional in the e-business thought leadership arena, and have searched high and low for a solid book on e-procurement. Neef's book has it all!!

It is well orginized, and backed up with solid data and research. Whether your an e-business professional or an executive looking to understand what B2B commerce and e-procurement can mean to your business, buy this book.

Download this book!

Free Ebooks Download