Suppliers wary of e-procurement

20 September 2000
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21 September 2000

Few suppliers are trading online, either in electronic marketplaces or direct to customers, despite the hype surrounding e-procurement, according to a survey by software company Biomni.

Just 12 per cent of suppliers have participated in a marketplace, while 20 per cent have used e-procurement software. Suppliers' lack of interest is not surprising, said Biomni's chief executive, Angus Gregory. "They face considerable difficulty maintaining any sort of competition other than price in an e-marketplace."

Peter Cooke, project director at Total Research, which conducted the survey, believes e-procurement has been over-hyped and is still in its infancy. "There is just so much exaggeration about people jumping onboard, the reality is bound to be different," he said.

Suppliers are using e-procurement to maintain existing relationships rather than reach new customers, the survey found. A third of respondents said they had been invited to get involved in e-procurement by a client. But some suppliers see no advantage in trading online.

"We work in an exclusive, specialist market," explained Don Hawkins, account manager at men's clothing maker Hilditch and Key. "One or two of our longstanding cloth and accessories suppliers may trade online, but we still deal with them by paper and fax. It wouldn't benefit us to sell online unless we got involved in the cheaper end of the market."

SMsep2000

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