E-commerce systems supplier Cisco Systems International will launch a ghost purchasing card system in the UK, Netherlands and Germany this autumn.
Cisco hopes to cut down transaction volumes by at least 25 per cent, said Jezz Noor, Cisco head of corporate procurement Europe, Middle East, Africa (EMEA). "This is not a pilot, this is an implementation,"he added.
A ghost card is, in effect, a purchasing card number without a physical credit card. The card number triggers the payment process.
To accept the card, a supplier must be signed up with a bank. This will guarantee payment within the specified number of days as agreed with the client.
Cisco is negotiating with several banks and 30 of its most important suppliers to get them signed up to the card process.
The biggest hurdle to setting up the system is making sure government tax offices can accept the VAT information for processing corporate taxes, said Noor. This must be done for each country, a time-consuming but unavoidable process.
The ghost card will only be good for the country in which it has been sourced because of VAT information demands by tax offices.
"It's a step forward from the procurement card," said Will Parsons, a consultant with Purcon Consultants.
The next major advance is to develop the VAT software for cross-border purchasing to allow wider international use of the ghost card.
To cope with more strategic procurement planning as the EMEA division expands, Cisco's procurement department will be increased from 12 to 25 people. According to Noor, a lot of national contracts might have to be set up for the ghost card to function because the card will depend on local suppliers.
Getting vendors to commit to the ghost card will be difficult, he added, even though they will be guaranteed payment within five days.
"Vendors can get their money at a much faster rate and that should motivate them," Noor said. "And they become our preferred partner."
Net-lag hampers medical progress
The progress of e-procurement in the medical sector is lagging behind other industries, according to an insider.
Dominic Weiss, chief executive of medical disposables supplier Medcompany, speaking at the launch of the firm's e-procurement system, claimed that the petrochemicals, distribution, automotive and utilities industries were far more advanced on the issue.
He blamed the fragmented market and the specialist nature of the industry. "It's difficult for hospitals to adopt preferred suppliers and streamline systems when dealing with an array of surgeons, each of whom prefer different brands," he said. "Maverick buying is a problem."
Joe Walsh, associate director of operations at the NHS Purchasing and Supply Agency, said medical e-procurement presented unique problems. Half of a NHS procurement spending was for non-medical supplies and much of that might not be suitable for e-commerce, he said.
But other areas work well with e-commerce. "The pharmaceutical industry is very IT advanced," Walsh said. In addition, L500 million of NHS Logistics Agency spend uses a sophisticated e-procurement solution.
Walsh added: "Like European health services, the NHS is piloting a number of e-commerce solutions in individual hospitals. We're getting the ball rolling." e-commerce in brief
IT not so crucial
If you are a director over 45 you are more likely to believe ecommerce and IT are not the most critical issues facing the company, according to a survey by the Chartered Institute of Management Accountants.
Success Beyond 2000, which questioned 400 directors globally in September, found 6 percent of respondents believed e-business was most crucial, while 8 per cent said IT was most important.
M&S seeks IT partner
High-street clothing retailer Marks & Spencer is set to outsource its Internet shopping services to a major IT provider. It wants to integrate a number of electronic selling channels into one order processing system by the summer of next year.
M&S has signed agreements recently With Microsoft Network's Internet shopping channel (MSN), Telewest's digital TV service and the BBC's beeb.com.
US loses net bank lead
Europe has taken over from the US as the world leader in Internet banking, according to the annual survey of financial services by consultancy Cap Gemini Ernst and Young. The firm predicts that the lead will grow in 2003, with a quarter of European banking transactions online compared with just 12 per cent in the US.
But cost savings fell below target, as British banks saved just 0.1 per cent last year with the net.
Online auctions for GDA
General Domestic Appliances, the UK venture between Marconi and US-based GE Appliances, is to move all its suppliers into online auctions if they wish to have new business with GDA.
The policy is already in operation with GDA's whollyowned companies, where 2,000 suppliers must bid in regular online auctions. Around half GDA's suppliers are in the US and a quarter in Europe. GDA is the household goods company of General Electric
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