Despite retrenching in the dot.com world, analysts project business to
business e-commerce to grow to a multi-trillion dollar market over the
next few years. This market has driven the development of many e-procurement
solutions. While most of these solutions focus on the optimization of
the material supply chain, several solutions focus on the optimization
of the service supply chain. Some focus specifically on optimization of
the IT service supply chain. What are these solutions and how do they
first step towards answering that question is to consider the concerns
of the service supply chain stakeholders. These concerns shaped the current
the buy-side the stakeholders include the service supply manager, the
IT manager, and the organization's legal, finance and human resource functions.
The IT manager is concerned primarily with access to quality service and
the speed of the service acquisition process. The service supply manager
is concerned with leveraging the organization's total buying power, managing
the suppliers, and maximizing the efficiency of the entire service chain.
The legal, finance, and human resource functions are most concerned with
the administrative aspects of the transaction that fall within their scope
sell-side stakeholders include independent professionals, professional
service companies and staffing agencies. The independent professionals
are concerned with exposure to organizations that need their expertise,
opportunities to bid on those organizations' projects, and being able
to provide services that will minimize the administrative burden of running
a small business. The professional service companies are concerned with
knowledge of project opportunities, the length of their sales cycle, and
client communication. The staffing agencies are concerned with finding
new prospects, strengthening client relationships, and streamlining the
service acquisition process.
concerns of these stakeholders have shaped the various solutions and the
different functionalities they offer. At a high level the solutions fall
into two groups. The first group is the expert marketplaces. Though the
functionality of these marketplaces varies, they each have a directory
of suppliers and offer some degree of matchmaking. The second group is
the service supply chain optimizers. The functionality of these optimizers
also varies, but each attempts to maximize the efficiency of the service
The core of each expert marketplace consists of a database of service
suppliers. The basic value the expert marketplace delivers is access to
this database and the capability to match an organization's needs to resources
in the database.
these marketplaces is straightforward. You either directly search the
database using some combination of criteria (e.g., skills, location) or
you post your project requirements and interested suppliers respond with
proposals. In either case, once you've identified a potential resource,
you initiate discussion. Many marketplaces offer some degree of collaboration
functionality that facilitates those discussions.
1 provides a list of several expert marketplaces. Although all these marketplaces
offer searching and matching, they do differ in focus and functionality.
The first six marketplaces include a mix of professional services including
some types of IT services. The last five marketplaces focus specifically
on IT services.
prequalified firms. 160,00 registered users.
To help free agents achieve long-term wealth, success, and a balanced
marketplace active in 8 languages with experts in more than 110 countries.
200,000 businesses and individual professionals from 140 countries
source for independent computer professionals
for sourcing technology solutions
Source developers marketplace
for IT services
IT manager should understand that some of these marketplaces focus heavily
on promoting the independent professional. Marketplaces like Guru, Ants,
and Freeagent focus on the independent professional with each offering
some mix of business support services. ProSavvy is an example of a more
evenly focused marketplace with functionality that addresses concerns
of both the buy and sell-side stakeholders.
qualification serves as a significant differentiator for several marketplaces.
Smarterwork, eLance and ProSavvy all place a heavy emphasis on supplier
qualification. Marketplaces such as Rent A Geek that function primarily
as directories perform little or no supplier qualification.
marketplaces offer some type of competitive bid functionality. This ranges
from collaboration functionality that facilitates proposal delivery to
auction functionality. Ants, NuAspect and ProSavvy each offer competitive
final differentiator is back end services. The primary example of this
is billing and payment services. Smarterwork, eLance, and HelloBrain each
offer some type of billing or payment service.
marketplaces can provide access to previously unknown resources, but how
well do they address the speed of the service acquisition process? Although
they speed up some aspects of the service acquisition process, these marketplaces
do not focus on the total service supply chain. You have to look at the
service supply chain optimizer solutions for that.
These solutions focus on reengineering the total service procurement process.
These solutions vary in focus and functionality, but they all attempt
to optimize the basic service supply chain. From requisition to the payment
process, these solutions look to streamline service procurement processes
and provide organizations with the information they need to strategically
manage their service suppliers.
these solutions is a much greater undertaking than accessing expert marketplaces,
but the potential benefits are far greater. Since theses solutions deliver
the greatest benefit when utilized enterprise wide, organizations should
assess their constraints prior to implementation. Implementation planning
may require process redesign and organizational buy-in. Most of these
solutions offer web-based implementations, but integration with the organization's
existing enterprise should be considered. Consequently, if we're talking
about process redesign and system integration work, we could be talking
about a significant project.
projects can generate significant benefits. Companies with a contingent
workforce in the 400-1,000 contractor range have realized annual savings
in the millions of dollars by implementing these solutions. How do these
solutions generate such savings? They generate them by automating service
procurement tasks, by providing visibility into the organization's spending
patterns and by enabling the monitoring of supplier performance.
2 provides a list of Service Chain Optimizers. These solutions all attempt
to streamline the service chain, but their focus and functionality vary.
A review of the following characteristics will help to understand those
e-procurement (SeP) Platform is a buyer-centric, supplier-friendly
online platform that automates the entire process of buying, selling
and managing professional services from purchase to pay.
application for acquiring and managing workforce suppliers. Originated
from Merrill Lynch's efforts to automate its professional services
open marketplace to help hiring companies staff projects with contractor
talent by matching their needs with firms or online services that
Vendor Management (CVM ) is an e-Procurement Resource Acquisition
Solution that manages the supply chain and all aspects of the ongoing
is a web-based hosted application that streamlines the complex processes
involved in the procurement and management of contingent labor.
a blended model of applications and services across the entire procurement
lifecycle for finding, hiring, and managing contract workers.
providing a front-end sourcing and candidate management system combined
with a back-end processing system
facilitates the quality-centric, cost-effective and timely execution
of IT service outsourcing.
hosts, and operates online marketplaces and exchanges for automated
IT maintenance services procurement.
platform designed specifically for the buying and selling of complex
software and Information Technology (IT) services
solution for the procurement, management, and delivery of IT services
is an e-commerce hub that streamlines business-to-business transactions.
Its first business focus is the IT outsourcing industry.
together high-quality Buyers and Sellers of complex IT implementation
listed in Table 2 exhibit one of two-business service focuses. They either
focus on the IT service chain or the general service chain. The first
seven solutions listed focus on the general service chain. Their functionality
contains no IT specific characteristics, though it can be applied to the
acquisition of IT resource.
six solutions focus on the IT service chain. Their functionality also
addresses the general service chain cycle, but aspects of it exhibit a
distinct IT flavor. That flavor includes a heavier focus on requirement
definition, RFP generation, and project management. These six solutions
also differ in the type of IT service they focus on. For example, CoFix
focuses on IT maintenance services for small to mid size organizations
while IQ4hire focuses on large complex IT projects.
Most of these
solutions attempt to create a service marketplace by providing access
to a service supplier network. Three components can comprise the network:
the solution provider's network, the organization's private network, and
public networks. Each solution approaches the supplier network somewhat
differently, but most position the organization to access it's own network
along with their network. SkillsVillage and eWork ProSource do this with
each providing access to their network of resource. eWork also provides
access to public networks. Vivant and Chimes' approach is to develop a
network of staffing companies and provide access to them. Each of the
IT focused solutions provides access to a network of service providers.
service providers with needs is a function all the solutions address in
some manner. The matching functionality differs among the solutions. The
IT specific solutions place more emphasis on their search and matching
engines. This reflects more complex requirements often imbedded in IT
RFPs. For the same reasons the IT solutions also highlight their supplier
evaluation and scoring functionality.
and RFP functionality differ in a similar fashion. The IT specific solutions
focus significantly on automating RFP development. This reflects a more
complex need for requirements documentation common to IT projects. The
general solutions focus on automating the resource requisition process
including any required internal approval process.
handle the requisition and management of third party resources. They deal
with the tracking, managing, and compensating of those resources. Consequently,
the need for integrating them with financial, human resource and procurement
systems is imperative. All of the general solutions state that they will
easily integrate into enterprise systems. Four of them (Nitorum, Vivant,
CascadeWorks, and SkillsVillage) also cite integration with Ariba's e-commerce
platform. On the IT side IQ4hire cites its membership in Commerce One.net's
E-procurement is not just for goods and material. The market now offers
IT services e-procurement solutions that open access to service sources
and seek to optimize the service chain.
who has struggled with the workflow associated with acquiring and managing
an IT resource knows that the opportunity for these solutions exists.
The question is can they deliver benefits to your organization? Understanding
your organization's requirements and the solutions the market currently
offers is the first step towards answering that question.
Mr. Hennigan's experience includes more than twenty years in analytical,
sales, financial and IT roles. As a Principal with Technology Contract
Solutions (TCS) Mr. Hennigan focuses on helping clients
minimize the risk and cost associated with their technology acquisitions.
Mr. Hennigan spent over ten years in senior management positions in the
Information Technology Department of the Liberty Mutual
Group, a Fortune 100 financial services company. Mr. Hennigan holds
a BS in Civil Engineering - Magna Cum Laude and an MBA from Syracuse
Hennigan can be reached at: email@example.com.