Going Beyond E-ProcurementGoing Beyond E-Procurement

Scott Allen, VP and chief procurement officer at H.J. Heinz Co., a FreeMarkets customer, agrees that's the hard part. "The key to GSM is being able to use the same tool on a consistent basis around the world for optimized business processes," Allen says. It's tied up in a company's ability to "view the results from the same perspective while also having consistent visibility, and not just in North America but around the globe."

Allen respects what FreeMarkets has helped Heinz achieve on qualifying suppliers, making requests for quotes consistent, and helping execute procurement. But he's cautious about the scope of the challenge beyond the vendor's front- end expertise. FreeMarkets' tools "need to be commercialized before we'll be comfortable going to production with them," he says.

Analysts agree that FreeMarkets is on the right track but faces hurdles. Fully developed, FreeMarkets ES "will be more comprehensive than other offerings," says Laurie Orlov, an analyst with Forrester Research. But right now, it's pretty basic, and FreeMarkets needs to cultivate a set of integration partners, she says. FreeMarkets' software has basic file-transfer integration using XML. APIs due later this year will let companies link the software to other enterprise applications, for more-complex data exchanges.

"Data requirements for GSM are huge," says FreeMarkets president Dave McCormick. Cleansing, organizing, and analyzing data must take place before companies are "ready for the larger steps."

The leading enterprise vendors and smaller players are looking at this sector, too. However the competitive landscape plays out, users say the realities of global business require a technology like global-supply management.

United Technologies Corp., which has strategic suppliers in Poland, Asia, and South America, should know. "What we have lived through is the trading of the familiarity of geographic proximity for the speed, accuracy, and robustness of real-time information about not just the products we buy but the suppliers who are making them and the capabilities and track records and quality levels of those suppliers," says Mike Brown, VP of worldwide sourcing at United Technologies, a customer of and investor in FreeMarkets. "That's GSM."

Photo of Glen Meakem and Dave McCormick by Richard Kelly