e-Procurement

When we wrote that e-procurement was getting interesting here we didn’t anticipate that it would be one of the most read Purchasing Insight articles of 2012. There is obviously an appetite amongst purchasing professionals for this topic and now there's a new report that you need to get your hands on.

Basware have just made a very interesting announcement and launched Alusta, a “cloud-based platform for business-to-business transaction collaboration." According to their announcement yesterday, Alusta (Finnish for "platform") provides "open, centralized access to all Basware services via a scalable, secure, open collaborative commerce ecosystem for buying and supplying organizations of every size and location." If it lives up to half of the hype, this will be a truly impressive platform. Alusta isn’t ground breaking. It isn’t even new thinking but what it promises is to bring together a wide set of leading edge tools technologies and techniques to create a purchase to pay platform that could be world beating. That’s the promise anyway. So what’s it got that’s so impressive?

The "power of free" recruits another player as Transcepta, the P2P network, announces the elimination of supplier charges. They announced their move last week and explained that they will now offer the Transcepta Network free of charge to suppliers regardless of size, volume, or type of transaction. This approach, they claim, contrasts with other networks who, in their words, "continue to place hurdles to adoption in front of suppliers, requiring suppliers to pay fees, use time consuming manual portals, and participate in data mapping projects that require IT resources". It's important to note that Transcepta are not increasing costs to buying organizations.

In the first post in this series, we put forward the view that e-procurement has never lived up to its promise.  The promise of buying everything from an on-line catalogue. A system that would enforce compliance to contract, eliminate maverick spend, reduce the cost of purchasing and provide rich spend data that could be leveraged to make even better sourcing decisions. And that’s what we’ve got right? Wrong! I would say that in most large organizations it is as time consuming, as costly and as painful to buy something as it was 15 years ago. The problem is that the job – the job of implementing automated web enabled procurement systems – was never finished. The whole point was that buying for business was supposed to be as easy as buying off Amazon. But the objectives were forgotten and the vendors took their eye off the ball.

We were promised hover cars and vacations on the Moon. What did we get? Luggage on wheels! The new millennium wasn’t what it was billed as and it’s a sad fact of life that reality rarely lives up to the promise. E-procurement solution promises are the same. One click, walk-up interface. Employee self-service. No training required. Turns your sandwich into a banquet! The promises are impressive but  “one click” actually means “one click as long as you’re only buying a pencil” -  any color you like as long as it’s black - and employee self-service is a euphemism for “do it yourself”.

The dust hasn't settled on the decision by the UK to turn its back on the EU when a freedom of information request submitted by Basware makes it look like Great Britain is making a habit of being left out in the cold. While much of the world is embracing technology to reduce the cost of doing business, HM Treasury, the UK government counting house, still receives 80% of it's business invoices on paper and 83% of local government authorities are in a similar situation.