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IBM partners with Ariba for renewed B2B push
Business-to-business software may be one of the dirty words of 2001, but the much-hyped technology isn`t dead yet.
Business-to-business software may be one of the dirty words of 2001, but the much-hyped technology isn't dead yet.
So says International Business Machines Corp. IBM.N, which on Friday said it was making a renewed push into the market through an alliance with one time B2B high flyer Ariba Inc. ARBA.O.
IBM will offer Ariba's purchasing software as a paid-for service over the Internet. The software lets companies connect to suppliers to buy basic goods, such as office supplies and furniture, at much lower costs than traditional methods that rely on phone or fax. The new service, called Quick Start, can get companies up and running and purchasing goods within 21 days, IBM said.
Towers Perrin, a large U.S-based management consulting firm, is one customer using the IBM's new service to wring costs out of its internal purchasing processes.
The company typically spends hundreds of millions of dollars every year buying office supplies -- desks, chairs and computers -- from up to 60 different suppliers. But the process is so complex, and its business so large, that its very difficult to control who's buying what, where, and for how much money, said John Hays, director of global sourcing and procurement for Towers Perrin.
"It's a major problem," Hays said. "We had no real ability to manage spend and vendor relationships throughout the country on a day to day basis," he said. Using Ariba's software, Hays said Towers Perrin has now managed to whittle its list of suppliers down to just one, a shift in its business strategy that the company believes will help it shave between 20 percent and 35 percent off its annual purchasing costs.
"We expect to save in excess of $80 million in five years," Hays added.
IBM's deal with Ariba comes at a time when most business-to-business software companies are struggling to keep their heads above water amid a sharp economic downturn and a drastic reduction in business software spending.
Bureau Report
IBM will offer Ariba's purchasing software as a paid-for service over the Internet. The software lets companies connect to suppliers to buy basic goods, such as office supplies and furniture, at much lower costs than traditional methods that rely on phone or fax. The new service, called Quick Start, can get companies up and running and purchasing goods within 21 days, IBM said.
Towers Perrin, a large U.S-based management consulting firm, is one customer using the IBM's new service to wring costs out of its internal purchasing processes.
The company typically spends hundreds of millions of dollars every year buying office supplies -- desks, chairs and computers -- from up to 60 different suppliers. But the process is so complex, and its business so large, that its very difficult to control who's buying what, where, and for how much money, said John Hays, director of global sourcing and procurement for Towers Perrin.
"It's a major problem," Hays said. "We had no real ability to manage spend and vendor relationships throughout the country on a day to day basis," he said. Using Ariba's software, Hays said Towers Perrin has now managed to whittle its list of suppliers down to just one, a shift in its business strategy that the company believes will help it shave between 20 percent and 35 percent off its annual purchasing costs.
"We expect to save in excess of $80 million in five years," Hays added.
IBM's deal with Ariba comes at a time when most business-to-business software companies are struggling to keep their heads above water amid a sharp economic downturn and a drastic reduction in business software spending.
Bureau Report