With an annual IT budget of $4 billion, GM's will be one of the largest online procurement deployments. It will include requisitions for mainframe-related products and services under previously negotiated contracts, as well as desktop and notebook hardware, software, and services. "Eventually, everything we buy in the IT world will come through this common system," says Bob Chaffin, corporate finance director for GM's information systems and services division.

GM will use the Operating Resource Management System application from Ariba Technologies Inc. Unlike most Ariba installations, most of GM's purchase transactions will not travel on the public Internet but will be routed over GM's secure intranet to EDS, which is contracted to handle 75% of GM's IT needs until 2006. After that, GM will look to buy directly from a variety of IT suppliers over the Net, says Chaffin.

Online procurement is being implemented by many large companies. This week, Ariba will announce that Nestle USA Inc., the food giant's North American division, will use Ariba ORMS for purchasing most of its nonproduction supplies and will integrate the system with its SAP R/3 application. GM rival Ford Motor Co. recently completed the six-month pilot phase of an Internet-based procurement system using software and services from Intelisys Electronic Commerce LLC, and is trading with more than 100 suppliers of nonproduction materials and services.