E-Procurement: Buying and Selling Electronically.

Position:Industry Overview

The virtual marketplace provides opportunities for businesses to order parts and materials without hassle.

The Internet has finally arrived for the Business-to-Business, or B2B, market and is changing the way business is done.

E-commerce B2B marketplaces are blossoming in many different forms, but all with the goal of making transactions between companies more efficient. Purchasing managers have seen the advantages-and electronic procurement (e-procurement) is perhaps the most obvious and value-added extension of e-commerce into the daily routine of business.

While paperless transactions have been the ultimate goal for large purchasing organizations since computerized inventory systems became standard business practice, the substantial up-front technology costs have discouraged smaller buyers and suppliers from signing onto electronic procurement systems. Internet-based e-procurement systems have changed this, and purchasing organizations can now join an electronic hub (e-hub) with other buyers, or even set up their own portal, with standardized systems that easily adapt to their company's requirements. The Internet allows even the smallest supplier to transact electronically with a large purchasing organization.

Just Browsing

The BUY ALASKA Program's BuyNet online database is a good example of a first tier e-commerce virtual marketplace. Operated through the University of Alaska Small Business Development Center, BuyNet offers a searchable online network to connect buyers and sellers. While the network was first established to encourage Alaskans to keep purchases in state, Bridget McLeod, program director for BUY ALASKA, has seen its growing use by others. "About 12 percent of the BuyNet searches last year were by people from outside of Alaska," says McLeod. "And we expect that number to rise significantly as we register our site with search engines and begin promoting it. Alaska businesses have a lot to offer."

BuyNet is a simple "post and browse" B2B Web-based directory that allows even suppliers without their own computers to be found on the Internet. It is an excellent venue for small businesses that want to display their capabilities to Alaskan buyers, and then to the world. "Buyers use the Internet to research and to make decisions," says McLeod, "and BuyNet is there to provide them with information on local suppliers that cannot always be found by regular search engines." Local suppliers give Alaskan buyers an immediate contact, with knowledge of Alaska practices-sometimes lacking in a supplier several time zones...

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