It’s rapidly beginning to look like there may be more to the idea of online procurement of products and services than just high-tech hype.

The number of dedicated electronic marketplaces is growing day by day. The latest to be announced focuses on the aerospace industry, in a joint venture led by Boeing, BAe Systems, Lockheed Martin and Raytheon. Together, these companies have an annual procurement budget of about $70bn.

Similar ‘clubs’ linking buyers with sellers have been initiated recently in the automotive, oil and gas, and financial sectors. Others cater specifically for small and medium size businesses. The basic goals include increasing the efficiency of the procurement process and reducing the costs involved. System operators and their backers typically recoup their investment by taking a small percentage of each transaction.

In a related move in the public sector, the Government has taken another step forward in pursuit of its own electronic procurement strategy. The Buying Agency, the link in the supply of a wide range of goods and services, last week commissioned ICL to move its catalogue onto an e-commerce platform.

This is a trend FMs should definitely keep an eye on.

Elliott Chase