eFiles: January 1, 2001

Companies Neglect E-Procurement

For many fortune 500 companies, its all talk and no walk when it comes to e-procurement. In fact, fewer than one-third of Fortune 500 companies order strategic goods from online suppliers, and many have no idea how well their e-procurement systems perform, according to a study from Hurwitz Group Inc., in Framingham, Mass.

According to Hurwitz, most companies purchasing online are buying goods that affect them indirectly; in other words, maintenance, repair, and operational goods and services. Far fewer companies are using e-procurement to automate production or manufacturing processes and purchase direct goods. Thats because companies need to consider their business relationships and business models first.

>Industry E-Markets Ready to Launch

Anyone who thought that last years spate of industry-sponsored e-marketplace announcements was little more than a public relations ploy should think again. Of 64 such e-marketplaces identified in a recent report by New York-based Jupiter Media Metrix Inc., 74 percent should begin transactions by the end of this year. Already, 41 percent of them are live, the report found.

Brick-and-mortar companies arent limiting themselves to just one e-marketplace investment. Jupiter researchers found 33 corporations sponsoring e-marketplaces in more than one industry. While 57 percent of those surveyed plan to eventually seek an initial public offering, unlike their dot-com brethren, it isnt a top priority.