Hurry up and wait - the order's in snailmail or fax

For all the hype surrounding e-procurement, Australian companies still rely mainly on the old fashioned methods of the phone, fax or snailmail to order office supplies.

It seems procurement will be one of the last organisational systems to undergo the 'e' workover.

An ERP Research Group survey on behalf of the SAP Australian User Group (SAUG) showed future intentions to participate in an e-marketplace for the next 12 months increased from 5 to 14 per cent. Some 78 per cent of respondents indicated mail, fax or phone is still the most common method of indirect procurement for goods such as office supplies, printing and advertising.

Surprisingly, for goods that relate directly to a company's finished goods, 76 per cent of companies also principally use these traditional ordering methods.

An analyst from Gartner said figures on what percentage of Australian companies are still faxing and phoning versus e-procurement were not available.

Anne Jones, EDP manager for Portmans Consolidated, said her company uses a mix of communications for procurement, but it is still very much down to the individual.

"Many of our staff still prefer to use the phone or fax, but e-mail is primarily used."

Jones said the fashion retailer first started using e-mail about 12 months ago and the switch has been a gradual thing.

David Lindill, manager ERP program office, Greater Asia region for Kodak, said when his company makes the move to SAP (the company is nearing the end of a global SAP ERP implementation) -- specifically to the Enterprise Buyer Professional (EBP) SAP e-procurement engine -- the present ordering mentality focused around the fax and phone will be phased out.

He said change management issues would be addressed through "mandatory procedures" with suppliers being notified of the risk that they might not get paid if the practice is not followed.

He said when the company moves to online procurement, it will use Web-based requisitions, 'punch out' to supplier catalogues and autofax from SAP.

Eric Chant, IT operations manager for Mission Australia, is also in the process of moving procurement online.

He said his team is currently configuring the intranet to deal with a bulk purchasing system scheduled to be up and running within 12 to 18 months.

He said all IT related supplies are bought online now, but office supplies are still ordered by fax or phone.

"We have more than 250 sites that are connected through a corporate intranet. We will be setting up a portal to a nominated supplier for future office supply procurement."

Chant said the delay in moving to e-procurement has not been due to supplier side issues. "It has just not been a priority for us."

However, he said IT has noticed through intranet monitoring that some sites are already using the Internet to order office supplies; at present these are not centrally supplied.

This gradual move to e-procurement seems to have permeated throughout many Australian companies.

According to the SAUG survey, companies predicted there will be little change in the next 12 months in their use of different procurement technologies.

However, companies did indicate that for indirect procurement, they will make a greater use of electronic exchange of trading documents (EDI) (up 5 per cent), e-mail (up 1 per cent) and the Internet (up 4 per cent).

While the main driver towards e-procurement is cost savings, the top four barriers, according to the survey, are infrastructure, personnel shortages, technology and integration-related matters.

Lindill said the time it takes to work with suppliers to create an online catalogue is also a significant hurdle.

He said it can take about 12 weeks per supplier to set up its online catalogue, with the ongoing maintenance of the content on top of that.

Copyright © 2002 IDG Communications, Inc.

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