BT refocuses its e-commerce strategy on managed services – with Oracle

BT, which launched its grand B2B e-marketplace two years ago for commodity buying, now expects to grow from £100 million goods traded in 2001 to £1,000 million within two years – by moving to managed services for its new ‘BT Transact’ initiative and partnering with Oracle for its 11i e-business software. Dr Bola Oshisanwo, head of BT’s Ignite Marketplace Solutions, says that its recent strategy review confirmed that “ERP vendors have won the battle for specialist procurement software,” and hence the move to Oracle – a BT partner for the last 15 years. He adds that for the moment, users also have access to both, via the SAP/Commerce One MarketSet platform, although this has seen little take-up on the existing marketplace. He believes there are three keys to growing e-procurement adoption among businesses in the UK – so vital to reducing costs and getting real value out of the introduction. One is BT doing what it does best – moving back to core managed services and refocusing on handling connectivity between buyers and suppliers instead of selling software licence. This will overcome key barriers to entry, he says – notably initial capital outlay in a down economy, perceived complexity of setting up private exchanges (where partners co-operate and trade securely, via an authorised access-only web hub), system integration and also supplier adoption. Beyond this, there’s going ‘open’: Oshisanwo says that, with immediate effect, organisations using Oracle’s e-buying application will be able to join those on Commerce One, SAP and PeopleSoft platforms already on BT’s current e-marketplace. He hopes that these two together will lead to users rolling out the service to their supplier bases and spreading adoption much faster. Then third is, through Oracle, providing for all aspects of e-procurement: the exchange hub itself and all associated software and services; the buy side, with catalogues, content management, pricing, etc; and e-sourcing software for finding and managing suppliers. Two as yet unnamed large consultancies are currently being courted by BT to provide what Oshisanwo describes as flexible services ranging from advice, to implementation to people for on-going supplier discovery and rating. For the future there are also other possibilities. Oshisanwo is at pains to ensure we all understand that BT will be driven – as well as driving – its customers. He says that if the demand is there, BT Transact will grow to cover direct production materials e-procurement and e-sourcing, and potentially also supply chain fulfilment and event management between suppliers and buyers. “We will be adding applications, and we have the ability to integrate these with other marketplaces,” he says – if required. BT’s existing web exchange already has some 450 registered suppliers. Manufacturing users, although currently thin on the ground, do include Whitbread Group and Akzo Nobel through web ‘punch-outs’. Oshisanwo says all of these report efficiencies through streamlined negotiation and purchasing processes. As with all e-procurement, the bottom line is better value through adherence to corporate agreements, reduced transaction costs and procurement professionals freed up and enabled to focus on more valuable strategic sourcing. He also claims that by integrating with a trading network, rather than establishing direct point-to-point connections, organisations get the benefits of trading with multiple organisations in an independent and automated, efficient environment, with issues like security and standards taken care of. In brief detail, BT Transact itself comprises Exchange, Buy and Source elements. BT Transact-Exchange provides the secure, scalable private trading environment. It incorporates transaction tools (invoicing, ASNs, etc all via XML) and content management software and services, with connection facilities for other e-marketplaces through BT’s membership of the Open Network for Commerce Exchange (ONCE). Then BT Transact-Buy provides for everything from agreed electronic catalogues behind the firewall to buying from externally held e-catalogues, with all the facilities of approved products, pre-negotiated prices, etc, and content management.. Finally, BT Transact-Source incorporates ‘Auction’ and ‘RFQ’ (Request for Quotation), both as dynamic, real time, web-based managed services that can be run as one-offs or with unlimited access. Web auctions have been well publicised and used by larger leaders; the RFQ function is similar but provides automated online tools that manage the processes of issuing and receiving responses to competitive tenders. Akzo Nobel procurement manager Thomas Buijtenhuijs says: “Through this managed service, BT addresses key technology issues that would otherwise hold us back. These include supplier and catalogue onload, and handling the disparate methods by which suppliers receive orders, such as via the web, XML, e-mail or direct integration into the marketplace. We now have a uniform, scalable, secure and cost effective solution… We have already agreed to move onto BT Transact, and will have completed this migration by early next year.”