E-Procurement Business Models



86th Annual International Purchasing Conference & Educational Exhibit

April 2001

Author(s):

Julie S. Roberts

Sunday, April 29
Workshop SB
William S. Schaefer
Vice President, Procurement Services
IBM Global Services
"E-Procurement Business Models"

The difference between a good chess player and a poor chess player is strategy. Good chess players begin with a strategic plan. As a child, Mr. Schaefer learned from this lesson in relation to chess from his father but has since related the experience and need for strategy in the beginning for e-procurement initiatives to succeed.

How did IBM develop its strategy? What were its strategic imperatives to begin the e-procurement transformation? IBM first considered that "strategy starts with an overall understanding of the opportunity for value." From there, the strategic imperatives were formed. These include:

  1. Continually deliver the lowest overall cost and greatest competitive
  2. Establish premiere supplier relationships.
  3. Maintain e-procurement leadership.
  4. Continually drive improved client perception of our value through increased influence and exemplary customer service.
  5. Attract, motivate, and retain the best talent within our profession.

IBM made an ideal start, but the organization was not exempt from challenges. Organization, people process, and technology problems challenged the e-procurement initiative. Nevertheless, the organization kept to its goal and addressed the problems as they arose.

What were the lessons learned? A few of the lessons learned include: don't just automate; reengineer the processes that can be more efficient; integration to legacy systems is key; start with a strategy and end with the technology.

It's no secret that implementing an e-procurement "way of life" is challenging, but developing a strategy to follow from the beginning makes it easier to stay focused.

By Julie S. Roberts, writer for Purchasing Today®.

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