e-BUSINESS TERMINOLOGY

CONTENT MANAGEMENT

Content Managment - the best explanation I have heard for content management comes from a TPN White Paper entitled "Secret to Speeding ROI."  e-Procurement provides the shelves for the store and content management puts the product on the shelf.  The main idea behind content management is to combine all supplies purchased by a company into one easy to navigate website.  In order for content management to work properly all items need to be standardized so the buyer is always looking at normalized content.  If a buyer is not able to find the item in the system, then he/she is likely to purchase outside of pre-negotiated contracts increasing costs by up to 20%.

Content Factory - Supplier catalogs are aggregated and normalized through a content factory.  The "factory" standardizes content in order for the catalogs to have the same look and feel.  After being normalized, the products from all the catalogs are placed on the market place interface.  This should make an intuitive atmosphere that encourage the buyer to use the e-procurement tool.   

Content Management companies include Requisite, TPN Register, and Vignette.

E-BUSINESS

B2B  is and will continue to permeate business.  Three categories that are essential for a successful B2B strategy are e-procurement, content management and middle ware.  

e-PROCUREMENT

e-Procurement - e-procurement vendors include Oracle, Ariba, and CommerceOne.  This software allows electronic transactions to take place.  

 The ROI of the e-procurement system should include the cost of the technology platform, the cost of content management and the integration costs for the system to be live.  Determine all benefits for an e-procurement system to find the ROI.     

BENEFITS FROM E-PROCUREMENT

• Consolidate supplier base - allows a company to work with fewer suppliers leveraging its ability to aggregate spend.

• Improves communication - reduces variability in the supply chain.

• Free buyers to work on strategic tasks - buyer's spend less time on tactical buys and more time on strategic issues.

• Decrease cycle times - especially important for companies in the technology industry.

• Lower transaction and processing costs - automating the purchasing process will decrease the amount of non-value added activities

• Reduce maverick spending -  maverick spending is said to be 10%-20% higher than purchasing from companies with negotiated contracts.  

• Enhanced reporting and auditing tools - an e-procurement system will track all costs allowing a company to determine the spend to each supplier.

• Decreased prices

• Improve compliance with approved suppliers increasing bargaining leverage

• Better Approval Controls

• Head count reduction

• Better utilization of assets

• Increase inventory turnover

• Quicker ramp up for new employees

• Faster response times

Indirect Goods have little differentiation and are primarily compete with price.  The best items for e-procurement are indirect goods that are routinely purchased.  The items classified as MROs are the most suitable for an e-procurement system.  Most companies start with MRO due to the high probability of success running through e-procurement.  Anticipated savings fro MRO items range from 5-20%.

Direct Goods can be much more difficult to procure through a marketplace.  Standard direct items such as nuts and bolts are easily purchased through a marketplace.  Configurable items are much more difficult to purchase through and marketplace and most content management companies are staying away from this market at this moment.   

e-Procurement platforms include Ariba, Oracle, CommerceOne, and i2.

MIDDLE WARE (E-BUSINESS)

Middle Ware - also called B2Bi (business integration) this product allows integration not only internally but also from buyer to supplier.  This process significantly enhances communication between buyer and supplier allowing better visibility through out the supply chain.

EAI (Enterprise Application Integration) - integrating systems in house.  

Adapters/Connectors - the plug and play functionality of a B2Bi system to another technology platform such as Oracle, Ariba or CommerceOne.  Adapters/Connectors should significantly decrease the implementation time of the product and make the entire implementation much smoother.