There are four variations of online buying

There are four variations of online buying

BY DOUG WEISBERG | SPECIAL TO GCN

Information technology managers have more choices than ever when it comes to deciding what, how and from whom to buy products and services.

But dealing with a large number of federal guidelines and prequalified sellers can be time-consuming and costly. No matter what the approach, acquiring best-in-class technology at a fair price typically requires buying from multiple sources.

IT organizations need a better system.

They need to take advantage of multiple sources to improve risk management, streamline acquisition efficiencies, satisfy end-user requirements for access to Internet information and look good to management by quickly implementing a low-cost solution. But it helps to find all those sources in one place.

E-procurement road

There are four basic paths to electronic procurement.

One is through third-party public sponsors. These electronic exchanges act as facilitators, bringing buyers and sellers together.

Exchanges like these typically operate on small transactional fees. They facilitate but take no real responsibility for transactions. They don't always consider government contract guidelines, nor do they maintain or balance inventories.

These exchanges work well for some types of purchases, but fall short of across-the-board IT e-procurement for agencies.

Another way to buy is through sole-source manufacturer Web sites. They are useful if you know exactly what you want. But to be effective, government IT organizations must make equipment decisions based on multiple suppliers; sole-source sites only sell their part of the story. For example, you can't research IBM Thinkpad contract specifics at Dell Computer Corp.'s Premier Pages.

The third path is full-blown e-procurement deployment software and consulting. This is the bread and butter of big-time software installation, business-process consultation and supply-chain remaking.

The more, the middleware

Assuming you want to deal with more middleware, you can expect the best from this process'and expect to pay for it. Ariba Inc. of Palo Alto, Calif., Commerce One Inc. of Pleasanton, Calif., and 2 Technologies Inc. of Toronto all have offerings that are excellent at assisting large organizations in re-engineering their acquisition of material supplies, especially relating to their raw materials.

But many government agencies are reluctant to use more middleware; core products are on the agenda for the most efficient operations.

In the end, the best bet might be path No. 4: virtual private exchanges. A VPE creates a self-service Web environment that pushes product selection and order initiation to the desktop PCs of frontline employees, while maintaining governmental trading agreements, workflow and rules.

VPEs can increase overall efficiency, keeping prequalified sellers and product availability up-to-date, and pricing confidential.

Sponsoring companies typically are established merchants, extending brick-and-mortar infrastructures to an online exchange. They are capable of taking best- in-class high-tech products and fitting them into a client's operations via multisourcing.

In many ways, a VPE acts as an extension of an agency's purchasing and IT departments, providing customized access to prequalified sellers.

A VPE also can deliver the benefits of aggregate buying, and take advantage of overstock situations and other supply-and-demand anomalies.

Doug Weisberg is president of Expert Server Group of Bedford, N.H. E-mail him at DougW@expertserver.com.

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