So what is e-procurement?

Many companies have had their first taste of e-construction in the past year, usually in the area of web-based project collaboration systems. Indeed, so quickly does the internet move that project managers are already faced with a bewildering array of such systems, with new ones appearing faster than significant new construction projects arise. But what about the other great promise of e-business – e-procurement?

All serious e-procurement systems share characteristics such as extensive product information, vendor location, online tendering, online ordering and delivery tracking. Then there are additional areas where vendors differentiate themselves. These are typically concerned with tools to aid the management of the approvals process. Price and service are also key features differentiating vendors.

BarbourExpert.com
Probably the fastest growth is in the online product information area. The November launch of BarbourExpert.com, for example, provides a searchable database of 30,000 construction products and materials. Expert tools that identify what the user is trying to achieve and then provide ready- made solutions will increasingly support such databases.

If proof were still needed that we all have to consider the European dimensions of the marketplace, b2build.com's services should be investigated. Its initial success has been in France, but it now has the UK firmly in its sights. b2build claims that its system aims to simply improve existing relationships, not replace them. For example, it maintains previously negotiated prices by providing each major user with a personalised supplier catalogue, which requires secure access. Its marketing approach has therefore been to identify subsets of contractors and suppliers that are willing to use the b2build system as a group.

Closer to home, Mercadium's first significant e-procurement offering will be a "request for quotation" tool. Everyone agrees that this should produce significant savings in time and cost for all users, although whether this will be reflected in the final pricing remains to be seen. Of course, the key issue is what will make one system succeed over its competitors. One major factor will be the number of suppliers supporting the system, another the level of pre-qualification of those suppliers performed by the trading hub itself.

Build-Online has been operational with its Tender-Online system for some time. This provides a web-based system of secure folders where documents can be stored for each tender package. Subcontractors can be given access to any chosen subset of the original documents that they need. Although a free flow of information does not necessarily mean a better response, companies that pick up the challenge are likely to find themselves in greater demand.

There are, of course, many other vendors targeting this area. For example, Eu-supply.com is very bullish about its recent success across Europe, and Arrideo (Amec, Balfour Beatty, etc) is working behind the scenes to develop its product set. As demonstrated below, however, those planning early involvement need to tread carefully, for there is still a long way to go before we see a settled group of suppliers in internet-related construction ventures.

Eu-supply.co.uk is still the only company claiming to have held successful construction tenders on its web site. And while online tendering has caught on with its Europe operation, it is still slow here.

By way of review, last month saw the emergence of a new player with the no-nonsense name of Asite.com (Stanhope plc, Rotch Property Group, etc) as well as the announcement of a good-fit partnership between Project Collaboration specialist TheBIW and trading hub Mercadium. We have also been treated to a merger of two of the relative giants of the field, or at least their US parents, Cephren Inc and Bidcom Inc.

Bidding
The result, Citadon, is still shaking out which of its products (and presumably people) are to remain. It illustrates well, however, the perils that lie ahead. As the Citadon site informs existing customers of Bidcom's "bidding" system: "For posting new bid opportunities, please contact us regarding Citadon's MarketNet services." In other words, it is time for customers to learn a whole new system, because they didn't choose an industry winner first time round. There is a lesson to be learned here for all potential users.