Nothing e-procurement does should cut supplier margins. At Capital One, suppliers weren't even aware of e-procurement systems. Even where suppliers are willing, the systems may not support electronic trading between companies if procurement methods differ between partners. For example, most companies have their own methods of classifying goods, and there is still a good deal of confusion about whether online procurement systems require standardised classification techniques. A lack of standardisation won't necessarily prevent the deployment of e-procurement any more than it has stopped the use of XML, said Adam Jacobs, founder and chief executive of electronic catalogue startup Cataloga.
Large companies have their own standards built up over years of trading.
The Electronic Commerce Code Management Association, however, is trying to persuade businesses to do just that. It wants all firms trading over the web to use the same product codes and classifications. Convincing staff of the benefits Companies implementing e-procurement software struggle not just with technology issues, but also acceptance of the system by employees. There will be a lot of religious battles. To persuade its 130,000 employees to work within the new system, Sainsbury's enlisted PricewaterhouseCoopers to review its procurement processes.