InformationWeek

April 3, 2000

Buying Power:
A Variety Of Vendors Suit Up For E-Procurement Services

Illustration by Noah Woods he E-procurement services market has grown so pervasive that companies not typically thought of in terms of E-services are staking out territory. Compaq Professional Services, for example, targets large enterprise accounts--those with at least $500 million in revenue and 5,000 employees--for its E-procurement services. "We've also stuck close to our roots in offering E-procurement services by choosing to partner with software developers like Commerce One and Clarus, because both operate on the Windows NT platform," says Frank Lanza, director of E-procurement and supply chain for Compaq Professional Services.

Compaq's E-procurement services offerings begin with informational and assessment workshops, which together range in price from $50,000 to $200,000. The assessment workshop is more hands-on than the informational, or executive, workshop, says Bill Galloway, E-commerce business development manager at Compaq Professional Services. "It raises questions like, How far do you want to integrate into the back end?" Galloway says.

Oracle, meanwhile, has offered E-procurement products since April 1996 and helps its customers develop online exchanges and exchange infrastructures. To take advantage of the capabilities an exchange offers, companies should bring in services partners, says Lou Unkeless, Oracle's senior director of worldwide marketing for manufacturing and supply chain. "Don't underestimate what the transformation of a company to an E-business involves," he says. "It's not just joining a market; it's an IT strategy that involves front-end to back-end integration."

Oracle's E-procurement services seemed like the logical choice to implement Oracle's Internet Procurement software at Hormel Foods Corp., says Dan Darveaux, director of IS for the $3.4 billion Austin, Minn., provider of processed meats and prepared foods. Hormel, which plans to roll out its pilot E-procurement system in May, hired Oracle Services to help with planning, implementation, and training. "I don't know that anyone else has the experience on Oracle's products that Oracle does," Darveaux says.

Darveaux, who has worked with Oracle Services in the past to implement Oracle financial applications, says that while E-procurement is a high priority at his company, other projects--such as the replacement of internal systems that manage Hormel's manufacturing systems--are more in need of Hormel's internal IT resources. "We couldn't do the E-procurement project without Oracle's help," he says. "This is a situation where outside consultants are essential to the project, and we've factored their cost into the eventual return on investment."

Illustration by Noah Woods

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