However, auctions are generally useful only for commodity items, such as cabling or microprocessors, that don't require customization. Since launching e-purchasing applications just three months ago, for both auctions and straight purchases, the Medical Systems unit has shifted 10 percent of its spending to the Internet. It's on track to move 50 percent of spending online by year's end, Hogan says, totaling hundreds of million of dollars in volume. You do it online, and it takes a lot of the touch time and the opportunity for defects out of the system. GE's approach to e-auctions is starkly different than most companies.
Big businesses tend to partner with dotcom companies which operate auctions as a service.
We have our own technology. As early as 1994, GE's Plastics unit was distributing technical documentation over the Web on a site called Polymerland. By 1999, Welch was praising that site as an example of what the rest of the company should emulate. There is clearly a higher level of expectation on the Web than over the phone. You will lose customers on the Web if they get a late shipment.