Cambridge Energy Research Associates has just released a report entitled “Promise, Reality and the Next Steps for E-Procurement (EP).”
CERA Director Richard Wood summarized the reports findings as follows. “We recognize three main categories of EP. Catalogues, reverse auctions and request for quotes. While some successes are reported for niche applications, the promise of broad roll-out has not been met. The lessons learned follow other new technology cycles; there is initial over-excitement, followed by disappointment. We are now entering the hard work phase. There are benefits from EP, but they are not going to fall into your lap.”
The CERA report found that some oil and gas companies had ‘abdicated responsibility’ for EP technology by working through consortia with fuzzy objectives. Now the consortia themselves are undergoing radical change. Meanwhile the vendor community felt that the focus of EP was to ‘beat down’ prices. Today, opinion has swung towards vendor-managed online stores. These work, but are not ‘overly grandiose.’
The CERA study concludes that the Catalogue/Shopping Cart technology still needs standards to be agreed on between buyers and sellers. Software companies are working on templates for Purchase Order and payment by P-Card, in a market that is splitting into a ‘shrinkwrap’ and a higher value ‘custom’ segments.
The request for quote technology is at a standstill, and is proving harder to implement than originally thought. But for CERA, EP is out of the technology closet. EP will no longer be handled by CERA’s ‘E2’ emerging technology business unit and will be handed over to CERA’s mainstream divisions. More on the CERA report from www.cera.com.
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