Companies looking to implement an e-procurement solution must establish a flexible architecture that can withstand the rapid change and market consolidation characteristic of the expanding digital market space. The boom in e-procurement services and offerings and customer use demands that companies increase their levels of integration with business partners.
In this interview, PeopleSoft’s John Webb, vice president of supply chain product management, and Kari Lervick, director of materials management, discuss the features of PeopleSoft’s new PeopleSoft eProcurement 2.0 offering, and how e-procurement can blend with customer relationship management (CRM) to offer a unified customer profile.
TR: Does the new PeopleSoft offering touch on the basics of e-procurement?
Lervick: Yes. An e-procurement solution is basically just streamlining the process of getting an asset or product set up into your asset management system. Then it is the responsibility of the asset management system to take it from there, but streamlining the process takes out some steps.
When you’re purchasing goods and services for use in a project, the e-procurement system can collect that project information. Then the project requester knows what they’re buying it for and why they’re buying it. They can enter that information immediately, and that allows us then in the back end to track all the expenditures in a project so you have a complete picture of what you’ve bought.
TR: What distinguishes PeopleSoft eProcurement 2.0 from the earlier offering?
Lervick: This version is really an upgrade of PeopleSoft eProcurement 1.0, expanding on previous functionality. The functionality for the earlier version included access to managed content, online catalogs, and the real-time price availability checks, as well as basic procurement functions such as requesting, order status, and purchase approval. With the release of 2.0, we built on this base, enhancing certain features such as supporting a multi-organization structure.
TR: How will a multi-organizational structure help companies that need solutions for multiple tasks?
Lervick: In a single installation of eProcurement, we can now have access to multiple buying organizations. Also, a company with multiple plants or distribution centers may procure goods and services differently and may want to control the purchase of goods and services separately. That could mean that they use different suppliers, have access to different catalogs, have different rules as far as approval goes, or have different accounting requirements.
TR: How will PeopleSoft eProcurement 2.0 tackle the digital difficulties of marketplace integration?
Webb: We have pre-built integration with Commerce One’s market site. So, although PeopleSoft is building its own market site, our users will also have access to Commerce One’s Global Trading Web. We have a standard set of messaging that we use between our product and Commerce One and that will go along with working with any type of trade exchange.
We are making sure that our e-procurement product has the capability to provide an on-ramp to a digital market place.
Lervick: You have a number of configuration options as far as integrating e-procurement with your back-end systems. You can integrate e-procurement with all your direct purchasing information and pull it directly into your purchasing application. You can also manage requests and dispatches through e-procurement, and then just interface that information into your accounts payable system so you can facilitate invoice matching and payment in the back system.
TR: Since it is impossible for one vendor to dominate every corner of the supplier market, how will eProcurement 2.0 impact the development of other e-procurement products?
Webb: We don’t expect to have either PeopleSoft, Commerce One, or SAP to dominate the total supplier population in the world. So our products have to be open and flexible enough to communicate with those market sites.
TR: Could PeopleSoft eProcurement 2.0 be used with another ERP or back-end legacy system?
Lervick: Many of our integration points are leveraged against the PeopleSoft ERP backbone so we have developed all of the interfaces with PeopleSoft ERP in mind. But there’s no reason why you couldn’t use any other ERP or legacy system to interface your requisitions, purchase orders, or receipts.
PeopleSoft is headquartered in Pleasanton, CA, and employs 7,000 people. In 1999, the company had revenues of $1.4 billion.
TR: PeopleSoft recently acquired the Vantive Corporation and has begun to incorporate their CRM solutions into PeopleSoft products. How does this integration fit into PeopleSoft’s procurement offering solution?
Webb: It’s really key for us, as we see CRM as the biggest growth area. Vantive is the number-two CRM vendor worldwide, so there’s a lot of strengths in that product.
What we see over the next few months is to increase the integration between PeopleSoft’s order fulfillment system and Vantive’s CRM system. If you think about what customers want to see, then it makes sense. Users want to see and monitor all customer activity. They don’t want to have that information in disparate systems.
One of the things that we are working on for release in September is a customer portal. The portal will allow our customers’ customers access to information out of the PeopleSoft and Vantive applications through a common user interface. We are also building considerable internal process integration between the Vantive system and the PeopleSoft order management, order fulfillment, and purchasing systems. This is especially useful to areas such as call centers, which need to have order and shipping statuses.
TR: Does a business that chooses not to seek out Web-based e-procurement options have a future as a business today?
Webb: It depends on the type of business. The Web is just another channel. In some areas, they could be losing a significant amount of business, but it’s really not so much the sale of a product as much as it is a sale of information on the product and the status orders, and the ability to do it on the site on a 24-hour basis. Companies that don’t go that route are probably going to have less customer loyalty as a result.
Lervick: Facilitating communication is going to become more and more important for every buyer and supplier out there. Customers are going to demand it, and suppliers are going to have to conform.