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November 29, 1999

Build The E-Commerce Catalog
New content-management tools bring together disparate data formats and item descriptions

By Saroja Girishankar

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ne of the basic requirements of a successful online-procurement operation is the ability to provide up-to-date catalog information from diverse suppliers. But that can be a lengthy and expensive challenge when you're a buyer for the Department of Defense and shopping from a list of 4.1 million items housed in several thousand disparate catalogs.

FastXchange Inc., an online-procurement service for maintenance, repair, and operation supplies and electrical parts, faces a similar challenge. The site offers buyers access to hundreds of thousands of catalog items from 30,000 suppliers, and it needs to be able to search and aggregate catalog product information easily.

However, these and other online marketplaces and procurement sites face a serious problem: how to automate the process of extracting, updating, and aggregating items from catalogs residing in disparate databases that range from Microsoft Excel spreadsheets and flat files to legacy and relational databases.

The task is made more difficult because different catalogs use different descriptions, attributes, and parameters to describe the same item, making it almost impossible to do comparison shopping in a meaningful way.

But an emerging class of automated tools and product suites is starting to simplify the process of catalog search and aggregation in real time. This means big savings in cost and time.

"We are saving millions of dollars a year on transactions and are cutting the order fulfillment from weeks to days," says Donald O'Brien, special projects manager for the Defense Department's joint E-commerce program office.

Defense spends $5 billion annually on consumable items such as food, clothing, medical equipment, and spare parts for weapons systems, tanks, and airplanes. It used to take up to 45 days to fill orders; now, orders sent over the department's EMall are filled within a few days. O'Brien credits the cost and time savings to the catalog-management tools.

Automated catalog aggregation is translating into big savings for others as well. FastXchange says it will save $10 million within two quarters. Of course, the Defense Department's savings are multiples of that, given its overall budget for consumable goods.

For the most part, catalogs are made up of static data and are typically updated manually on a monthly basis. While this inefficient process might not affect items such as product descriptions, a buyer's ability to shop online is seriously impeded when pricing and availability changes are not updated immediately.

Before Defense's EMall, an online-procurement service that opened for business in January 1998, the department relied on a proprietary electronic-procurement process that limited buyers to a handful of preapproved suppliers. The catalogs could not be automatically updated in real time to include the latest changes in product descriptions, pricing, and availability.

But all that changed when Defense implemented aggregation tools--eBroker and ePort--that were originally developed to handle the department's numerous catalogs under an initiative funded by the Defense Advanced Research Project Agency. The eBroker and ePort products are now sold commercially by PartNet Inc.

For Defense shoppers, EMall gives browser access to the latest catalogs from a larger pool of suppliers made up of traditional contractors and other commercial suppliers; it also results in shorter turnaround on orders at reduced costs. Average transaction fees of $24 per order have been cut in half for Army, Navy, and Air Force shoppers, thanks to the automation, O'Brien says.

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