Technologies for buying technology

Smart IT shopping is mostly about implementing the right procurement strategy, but software itself can provide the tools to analyze spending, enforce purchasing policies, and eliminate proprietary roadblocks that oftentimes lock you into a single vendor's product line.

Big e-procurement systems from familiar vendors such as Ariba, Oracle, and SAP all offer that sort of functionality. But hosted services such as those delivered by PerfectCommerce and Ketera provide interesting alternatives, because they can be deployed quickly and still enable you to create departmentwide purchasing workflows. Either way, analysis tools integrate with your existing ERP or other systems to provide comprehensive spending information that helps you identify savings opportunities.

Kennametal, a global manufacturing enterprise, uses an in-house spending analysis and reporting solution that "looks like an Excel spreadsheet on steroids," says Jim Cebula, director of global purchasing at Kennametal. "We can see what percent of our spending for, say, PCs is with our top two suppliers. If it's not 85 or 90 percent, we can use the information to consolidate purchasing and negotiate global contracts." Kennametal then uses Ketera's e-procurement hosting services to provide employees with an easy, "Amazon.com-like" interface for ordering PCs, peripherals, and other typical IT operating expense items from those suppliers.

The combination of spending analysis and Ketera's e-procurement interface saves money two ways. First, it reins in maverick spending. "Anytime someone chooses to purchase software or hardware off-contract, we see a 10 or 15 percent premium over negotiated contracts." And it helps Kennametal negotiate better deals. "The knowledge that we control sourcing or purchasing at all our global locations puts us in a very good negotiating position with our suppliers."