Managing Supplier Product Information and Catalogs -- Huge Impact on Total Costs and Returns of E-Procurement Systems.

Business Editors/Hi-Tech Writers

HALF MOON BAY, Calif.--(Business Wire)--Jan. 5, 2000

Granada Research's new report, Sources of Product Information for E-Procurement Applications: Service Providers and Pricing, provides hard-to-get pricing information, fee schedules, and assessments of over 25 major Web marketplaces and content service providers.

These data are critical for financial and purchasing officers to estimate the total cost of ownership and return on investments for indirect procurement applications.

In addition to very detailed pricing information and provider evaluations, one of the report's chapters provides the financial model and formulas for calculating how content impacts overall costs, benefits, and returns of purchasing systems.

New Web procurement applications that support indirect buying offer great savings and process efficiencies. An important hidden cost of these systems, however, is the capture and management of supplier product information and catalogs. This component of e-procurement is the most challenging aspect of these systems -- without supplier product information, the systems don't work.

Capturing and managing supplier electronic catalogs and product information requires expenditures of labor, IT resources, and sometimes third-party service and e-marketplace fees. Often these expenses are not identified until after the procurement application begins deployment.

Yet, the expenses associated with supplier product information dramatically impact total cost of ownership (TCO) and return on investment (ROI) of these systems. Buying organizations must understand the alternative sources and costs of supplier information in order to fully calculate TCO and ROI.

Granada Research's report provides the data and analyses for managers to understand these alternatives.

The report examines today's sources and methods for gathering supplier product information, what their exact costs are, and how these various sources and methods figure into the overall costs and benefits to be gained from Web-based e-procurement.

The report is a powerful resource for CFOs, CIOs, procurement managers, and business analysts who are evaluating the impact of e-procurement at their organization. Not only does the report provide the detailed fee schedules of 27 leading e-marketplaces and content service providers, it presents a quantitative model for evaluating supplier information content.

Using the model, the buying organization can determine how much it should spend on the specific issue of gathering, aggregating and managing supplier information.

The report is divided into the following sections:

EXECUTIVE SUMMARY: an overview that allows a quick summary of the many alternatives to product information, their costs, and the criteria by which to make informed decisions on content.

THE IMPORTANCE OF PRODUCT INFORMATION CONTENT TO CORPORATE PURCHASING: Granada Research provides the analytical-quantitative treatment that links content to overall benefit of the system. This section overviews formulas and quantitative approaches that purchasing organizations can take to place a value on their suppliers' product information content.

It demonstrates the connection between end-user usability and content. If the content is incomplete, hard to navigate, or poor quality, end users will abandon the system and resort to purchasing off contract. Investing in content will keep users buying from strategic suppliers.

How much investment is optimal? A mixture of manual creation of content by the purchasing department, the use of direct feeds from some key suppliers, and the use of a third-party content management service or e- marketplace become the pragmatic approaches.

CRITERIA FOR EVALUATING CONTENT MANAGEMENT SERVICE PROVIDERS: this chapter provides a comprehensive list of functional requirements that a service provider should meet when assisting a buying enterprise gather and manage supplier product information. It is a perfect list with which the buying organization may create an RFQ to be sent to service providers.

Specific criteria include: fees (e.g. does the buyer pay, does the supplier pay, is it all ad sponsored, etc), solution scope (is it a ongoing service or one time "spend analysis" bill of materials, is it a marketplace or custom information), content scope (e.g. are product parameters listed and searchable, how frequently updated is the information, etc.) content quality, and requirements for integrating with commercial systems and processes (on both the supplier and buyer sides).

BENCHMARK PRICE SCHEDULES AND STYLES: in a two page table, 27 leading service providers are listed along with the fees charged for supplier information services. Fees are identified as to who is billed: supplier and/or buyer.

SERVICE PROVIDER PROFILES: Granada Research gives its perspective on the 27 service providers listed in the table.

CASE STUDIES OF PRODUCT INFORMATION MANAGEMENT: we provide snapshot case studies of eight companies and how they approach the problem of managing their product information from suppliers and/or going to customers.

FINDINGS AND RECOMMENDATIONS:

FURTHER READING:

The report is available now. For more information, contact:

Mary Turner 800/588-6099 [e-mail]

About Granada Research

Granada Research is a consultancy based in Half Moon Bay, California that helps companies capitalize on electronic commerce opportunities. Its research and consulting focus is on business-to-business "content-driven" commerce.

Through publications, retained advisory services, and custom consulting, Granada Research assists companies and IT vendors in implementing e-commerce solutions, especially those involving product information and catalogs.