IBM Purchasing Product Uses Amex, 1st Bank Cards

<H1> IBM Purchasing Product Uses Amex, 1st Bank Cards</H1>By Mary Ann McNulty

<I>San Francisco </I>- IBM is forging alliances with both First Bank System and American Express to combine IBM's new electronic commerce solution for large businesses and governments with the card vendors' purchasing cards.

Announcing the pacts at the Internet Electronic Commerce conference in San Francisco last month, the vendors said their system will streamline the purchasing process, making it easier than ever for employees to order pre-approved items-including travel-directly from preferred suppliers. At press time, IBM was negotiating with other purchasing card issuers to provide customers with even more payment options.

Buyer-Supplier Link

IBM World Purchasing is a network-based purchase solution that links buyers to suppliers electronically. In late November, IBM intends to debut new versions of World Purchasing that will work on the Internet or intranets and for those using Lotus Notes 4.0, said Ray Blair, director of marketing and channel enablement for IBM's Internet Division. As with competing electronic catalog offerings, buyers will access World Purchasing to purchase routine items like computers, office supplies and furniture, as well as custom products from their preferred vendors, by looking through electronic catalogs. Using the Amex or First Bank purchasing card as a payment vehicle is designed to increase the integrity of transaction data and audit trails.

Electronic commerce options such as World Purchasing are designed to save time, reduce costs, improve purchasing control and streamline the workflow for corporations. Industry experts estimate that it costs a corporation between $150 and $200 to process a purchase order. Electronic catalogs are designed to drastically reduce such costs by eliminating the paper and automating the order, billing and reconciliation processes.

Customers Want Details

"One of the challenges purchasing card issuers face today is giving their customers the high level of transaction detail they need, because suppliers do not necessarily support full data capture, such as type and number of items purchased and price per item, consistently through the credit card system," said Steven Putney, president of corporate payment systems for First Bank. "With IBM's new service and our purchasing card, organizations have a solution that will give them better control over their purchasing process while reducing their costs."

One of the benefits IBM's system brings to purchasing cards, Blair said, is detailed reporting. IBM can pass along all the detail of an order to the card vendors to integrate into their systems and pass on to customers.

IBM is creating both custom catalogs for corporations and some generic ones. Most large customers buying this service-including ABB and Promus Hotels-are including products from their preferred vendors that employees regularly purchase. In addition, IBM has negotiated more than a dozen preferred deals with software, office supply and computer vendors like Stream, Microage and Corporate Express.

Executives also are evaluating whether it makes sense to add travel to the core offering, and if so, how to do it. In talking to corporations, IBM has found everyone has a different idea on how travel should be ordered from such a system. Some want travelers to check off their arrival and departure cities, dates and times, while others want travelers to be able to access a CRS-type display of all available options from the system.