Microsoft has entered the e-procurement market concentrating on suppliers that have previously been squeezed by purchaser-focused solutions.
Built on .Net Enterprise Servers, the Microsoft Solution for Supplier Enablement System, allows suppliers to link and automate their ordering and fulfilment.
"We have created a comprehensive solution that provides enterprise reliability at a cost that makes it feasible for any size supplier to implement," said Mark Buckley, server solutions marketing manager at Microsoft.
A number of purchasers had been attracted to e-procurement on the back of promises of significant cost savings, said Alan Lawson, research analyst at Butler Group.
But while purchasers could see the advantages, there had been little benefit for suppliers faced with the costs of implementing an e-procurement system, but achieved few of the savings, he added.
"A supplier dealing with 12 different clients was faced with potentially having to deal with 12 different procurement systems," Lawson said.Integrating new systems with existing applications and infrastructure was a significant cost for many suppliers, said Buckley. The solution includes pre-built integration capability with cXML (commerce XML) and XML Common Business Library (xCBL) standards favoured by Ariba, Clarus, Commerce One and SAP.
Purchasers could exert some influence over suppliers in their choice of e-procurement products, and with firms such as i2 and SAP dominating the supply chain management market, Microsoft will face significant challenges in gaining acceptance.
But the Microsoft brand will work in their favour, said Lawson. "The ability to translate information between systems will be essential in persuading suppliers that they do not have to be dictated to by purchasers. Microsoft have made a good choice in providing XML support." he said.
Analyst firm Gartner had earlier predicted that European Internet business-to-business transactions would exceed 209 billion Euros in 2001. This would represent 109 percent growth from 2000, but would still only account for six percent of the total European business transactions.
Part of the reason for the slow growth had been the complexity of the re-organisation needed to move to an electronic purchasing system. "It will take time for a large company," said Petra Gartzen, research director at Gartner.
The Microsoft Solution for Supplier Enablement bundles Microsoft Windows 2000 servers, BizTalk 2000 server, SQL Sever 2000, Commerce 2000 Server and Accelerator for Suppliers.
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