Business Pioneers, E-Procurement: OK to Be No. 2

March 13, 2001 —

Analysts at Gartner Group Inc. in Stamford, Conn., are noticing a curious phenomenon: Even companies that are usually IT followers are racing to be the first to implement e-procurement systems. But then the pioneering projects get bogged down in technical and political issues. What's wrong here?

The problem is that "there is no first-mover advantage in e-procurement," as the title of a Gartner bulletin puts it. Being a pioneer in this market is a huge hassle. The projects grow out of control, the software vendors are immature, the e-procurement software itself is immature, and very few consultants have much experience with it. Plus, "early adopters of e-procurement are likely to have to educate many of their suppliers," the bulletin says.

Worst of all, early e-procurement implementers face high prices for software and transaction fees, while "later entrants can expect to have many more attractive offers available." The bottom line: "Those who expect a rapid return on investment are in for a big disappointment," Gartner reports. So scale down those expectations of "miraculous transformation" and start with a modest project focused on improving the process of ordering white-collar supplies.

Computerworld