E-commerce: Unconquered Territories

After faltering at the starting block, online procurement might have found the magic combination to finally make businesses sit up and notice: indirect buying.

And PC giant Dell Computer is leading the pack.

Businesses have resisted online buying services until indirect e-procurement arrived on the scene mostly because open buying was slow and perceived as less-than-secure.

E--procurement is the purchasing of support goods and services through an online, private customized catalog. The catalog contains products a company is interested in, and has approved for employee purchase, as well as a company’s negotiated pricing.

According to AMR Research, the worldwide market for indirect procurement applications grew 67 percent last year, reaching $259 million in sales. AMR projects 130-percent growth of the applications during 2001. By 2005, research group Gartner anticipates $8.5 trillion in transactions will take place through e-procurement.

Untapped Resources

Buyer-hosted electronic catalogs are one of the unconquered territories of the New Economy, but they’re worth learning more about. Indeed, there are just a few players who today can count themselves among the success stories.

With more than 50,000 business customers using its online purchasing and information portal, Austin, TX-based Dell Computer Corp. is ahead of the curve.

Dell’s Premier Pages, which target corporate buyers, differ from its public access e-commerce site in several important aspects, including the following:

•customers can browse at their own tailored levels;

• individual access privileges are created for companies;

• there are unique pricing models; and

• controlled product management is determined by each corporate client based on past preferences.

Prices also are based on what has been negotiated in contracts. Buyers can refill orders with one keystroke, since previous purchasing information is already stored, sorted and instantly retrievable.

The Premier Pages have put a customized face on buy-side procurement since 1996. Its business-to-business (b-to-b) services combine Dell servers and integration software to link customers’ existing procurement systems directly with Dell and other trading partners. This allows customers to configure their systems in real time, with up-to-date pricing for each organization.