Procuring the e-commerce prize
By Jeff Moad
May 24, 1999 9:00 AM ET
zdnet.com
Recently, Oracle CEO Larry Ellison made an announcement that should come as good news to corporate IT managers, if not to all Oracle software resellers. Ellison said that, within a year, Oracle will be selling software only through its electronic commerce site.
The spectacle of another large IT vendor embracing online sales and distribution of its products is good news for IT managers because it brings them one step closer to the day when corporate buyers can shift much of the burden of managing the acquisition, upgrading and tracking of software, PCs and other IT assets to vendors or other third parties via the Internet.
Today, IT managers spend way too much time overseeing the care and feeding of the technology procurement and asset management process. At many companies, substantial steps in that process are essentially manual. Tracking changes in vendor product catalogs, issuing purchase orders for new equipment, accounting for purchases against standing volume purchase agreements and tracking assets as they move through a distributed organization take too much time and, in the end, distract IT from its purpose: creating value in the form of new applications and services.
As technology vendors move to exploit e-commerce, however, they need to keep in mind that the IT procurement process at most enterprises is complex and that corporate buyers need a broad, complete set of online procurement services. The ability to execute a purchase transaction or download a piece of software over the Internet is just the beginning of what IT managers need. At least as important to them as being able to find a good price or make a purchase is the ability to track the movement of assets through their organizations, manage upgrades and replacements, and keep tabs on financing and depreciation status on IT assets.
Fortunately, as this week's PC Week Strategies special report, "IT Supersites," shows, a few e-commerce sites are beginning to offer some of the services IT needs. Unfortunately, none of these sites is yet able to fill the role of a one-stop procurement portal for IT.
Single-vendor sites don't offer a wide range of products from competing vendors, and independent, IT-oriented e-commerce sites show their immaturity in one way or another. All, for example, lack robust integration with users' or vendors' back-end operational systems. And some are missing important customization or comparison-shopping features.
The sites we looked at are rapidly expanding the range of online services they offer. The question now is whether they will do this fast enough. If not, there's a very good chance that corporate buyers, rather than turning to seller-generated extranets as their home for online procurement services, will build their own online purchasing hubs using software and services from vendors such as Ariba, Commerce One and AOL/Netscape. Such buy-side procurement systems offer some big advantages, including better integration with back-end financial systems.
The bottom line for IT-focused e-commerce sites: If they don't get better fast, they could become irrelevant fast.
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