EMPTORIS IS AN electronic procurement start-up company focused on industrial strength applications. And although the company readily admits that it does not have the high profile of other companies in the e-procurement space, it does solve a series of problems that are significantly more complex than trying to automate the buying of office supplies. In an interview with InfoWorld Editor in Chief Michael Vizard, Emptoris CTO Gary Li describes how the company's technology can be used to increase the economic clout of corporate buyers.

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InfoWorld: As a company, what is your area of expertise?

Li: We specialize in e-marketplaces where you're trying to buy material multiple times that has complex requirements. We help the buyers connect to suppliers and conduct businesses over the Web.

InfoWorld: How is this accomplished?

Li: We're focused on two areas. One is the intelligent workflow that allows buyers to publish their needs over the Web and then allows suppliers to respond to a request for quote online. We have the capabilities that allow the buyers to control the whole RFQ [request for quote] process and control who can access the RFQ, who can respond, and what rules they must respond by. The other part of our focus is on the analysis part. If you look at a b-to-b [business-to-business] transaction, particularly in the RFQ, you have very complicated requirements. From the supplier's side, you also get very complex pricing. Some of the things you see in business-to-business transactions are volume discounts, bundled bids, [and] capacity constraints. All that has to be factored in, and you also have business rules from the buyer's side such as number of vendors who want to follow the minimum performances requirements and things like budget constraint. We have this powerful optimization engine that takes the complex requirements, the supplier's responses, and the business rules into account to generate optimal recommendations for the buyer.

InfoWorld: How does a workflow process help facilitate an online transaction?

Li: The intelligent workflow capability makes the whole RFQ process a lot more efficient so the buyers can manage more suppliers ... more efficiently. By contacting more suppliers, you automatically get a better deal. If you now work with 20 suppliers, you can [conceivably] work with 50, so you're guaranteed to get a better deal.

InfoWorld: Can you describe how one of your customers is using your software?

Li: Sure. Industrial America is an e-market that trades industrial goods. Once a supplier submits a bid ... whether it's a volume discount, whether it's a simple bid, whether it's a bundled bit ... the buyers can look at the results, look at the prices, look at the performances, look at other business rules, and run our optimization engine to create an optimal recommendation. Buyers can look at the results and then set up another business rule, run another scenario, and compare the results. The system can also automatically notify all the suppliers that responded, including those that get the awards and those who do not. That way you can explain to them the reasons why they did or did not get the award.

InfoWorld: What's the core architecture of the application?

Li: It's based on the Java 2EE framework and we support both NT and Solaris.

InfoWorld: How did you get involved in this space?

Li: I have been working a lot with decision support systems. I started off with a company called PDC that was later acquired by Sabre. We built decision support systems using optimization technology for a lot of the largest transportation and shipping companies in the United States. After that I went to join an investment software company that built one of the largest private exchanges for the equity market.

InfoWorld: If there was one thing you would change about business today, what would it be?

Li: I would definitely like to see people get educated a little bit more about the power of the Internet and how it could help e-commerce in general. I think a lot of people right now realize the power of e-commerce on the consumer side. Businesses are gradually getting into these areas, but most are focusing on the sell-side. But the Internet can bring a lot of the power to the buy-side as well. If you're a buyer, you have a lot of leverage. Not everybody realizes that potential, or is able to capitalize on that leverage.