How Far Has E-Procurement Come in the Maritime Community?

Friday, October 11, 2002
As dot-com firms that lacked a solid foundation disappeared from the landscape, the strongest are left standing amid the rubble. It is worth noting that at the height of the 'dot-com' boom and phenomenal statistics from various research groups, Gartner Group predicted that 75 percent of e-business projects would fail because of a lack of understanding of technology and poor business planning.

Of the companies predominately built on smaller amounts of capital from within the industry such as Oslo, Norway-based MarineProvider — from day one there was a vested interest in not only the day-day operations of the company via its investors, but there was a mission that MarineProvider had — which was to assist companies already within the maritime community.

Slow and Steady Wins the Race MarineProvider has emerged as a leading supplier of e-Procurement solutions in the marine industry, and now has more 40 percent of buyers that have signed up to use an e-Procurement system as clients, including Maersk Line, Ltd.; Golar LNG; Sun Cruises; and China Navigation. Collin Lewis, CEO of MarineProvider is confident that this is just the beginning of the company's already-established client base.

"It's clear that we (MarineProvider) are moving through the early adopter phase and that significant activity is taking place in the e-procurement sector, we've seen the concerns our clients have regarding e-Procurement evolve, and crucially one area that has changed is the understanding that e-Procurement can be an intricate part of maritime business strategies not in the future but now."

The impact MarineProvider is seeing varies from a complete transformation of existing procurement business to just a peripheral effect on current operations. However, the bottom line is that there is now strong recognition that there will be e-procurement in the marine industry. While some organizations are overcoming the barriers to e-business transformation, many companies still perceive significant risks and uncertainties, and there was a slowing of the predicted implementation of e-business in general.

Many companies adopted a "wait and see" attitude before investing heavily in relatively unproven systems that promised large and timely returns. The shakeout of e-commerce has alleviated some of the uncertainty, but has also interjected new concerns. Suppliers fear that the benefits of supply chain integration are accruing disproportionately towards the buy side. In order to ease these concerns, MarineProvider has been very careful to provide a solution that will remove inefficiencies on the supply side.

"An e-procurement solution should reinforce relationships with suppliers, not replace them, Lewis said. "MarineProvider's focus is on complementing - not substituting the relationship."

The company is aware that you cannot have e-Procurement without integration; that is why the largest part of MarineProvider's investment went into standardization of interfaces, connectors, out of the box solutions, XML type appliances to connect different systems.

MarineProvider believes that as its customers begin to see early gains from e-commerce, they will want to implement it within other areas of their business. In the maritime industry, an example of this would be the partnership that MarineProvider has established with online fuel exchange company Oceanconnect.

With a variety of businesses continuing to see e-business as a long-term strategy, these same companies are already moving into the next-generation of their e-business implementations.

Tony Giambrone of Maersk Line, Ltd. in Norfolk Va. spent almost two years analyzing the claims of various e-commerce companies before deciding to move ahead with MarineProvider.

"We (Maersk Line), wanted an electronic procurement solution that was easy for our staff to use, offered a very safe e-business environment that was quick to implement. There was no cost to the suppliers, thus taking away the barriers to entry and introducing our supply partners to e-Procurement trading."

MarineProvider has built integration adaptors into leading systems such as AMOS, JDE, PeopleSoft, SAP, ShipNet and more and offers ship owners a total solution from ship to shore to supplier all electronically.

And MarineProvider's strategies and business philosophies have melded together as one, as transaction volumes have grown significantly during 2002 with over 19,000 in Q2 of 2002 and 11,000 in July alone. Suppliers are also beginning to see the benefits of receiving standard documents from multiple buyers and are subsequently contracting MarineProvider to integrate into their systems.

Stock listed on the Oslo OTC with headquarters in Oslo, Norway, MarineProvider also has offices in New Jersey; Houston, Texas; London, U.K.; and Hong Kong.

Thanks to Marine Provider's New York office and Ron Taylor - V.P. Business Development for their contributions to this article.

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