Elcom Inc. and GE Capital Financial Inc. have developed a credit card-like e-procurement product that enables companies to integrate the processing of large purchases made both online and offline.
The Elcom e-Payment Solution, which the two companies showed at the iSource Summit here last week, is a combination of GE Capitals existing purchasing card and Elcoms PECOS (Personal Electronic Catalog Ordering System) Internet Procurement Manager software. Elcom, of Norwood, Mass., claims purchasing cards can cut internal processing costs by 30 percent or more.
The new bundle provides purchasing managers at midsize companies with a plastic card that, like a corporate credit card, can be used to buy big-ticket items without further authorization. When goods are bought online, the purchase information is routed through Elcoms PECOS system and the buyers back-end accounting system. Information from offline purchases is routed to GE Capitals Paris settlement software and, once a planned data warehouse is finished this quarter, on to PECOS.
In addition, Elcom e-Payment Solution slashes the traditional 30- or 60-day payment time to two days.
It is sold on an application service provider basis.
A recent study by American Express Co., itself a major issuer of purchase cards, found that online procurement in the midmarket is indeed growing. Forty percent of the 500 companies questioned said they are purchasing online and that they plan to increase that by almost 20 percent over the next 12 months. The study also found that electronic channels represent about 33 percent of online purchases.
Jeff Peterson, vice president of IT and shared services at Unicco Service Co., in Auburndale, Mass., is implementing Elcoms e-procurement platform. At the same time, Unicco is switching its purchasing card processing from AmEx to Visa.
"With AmEx, we werent getting all the level of integration and reporting that we needed," said Peterson, who will consider converting solely to the Elcom platform as its integration of GE Capitals purchasing card matures.
Even Elcom officials acknowledge that purchasing cards will never be a panacea; there will always be purchases made off-site using traditional procurement cards.
Cracking the middle market is also a challenge. One incentive offered by Elcom: a competitive fee structure. The more customers use the Elcom e-Payment Solution, the less they pay for the service, company officials said.