<B> MasterCard Plans E-Biz</B>
By Mary Ann McNulty
<I>Purchase, N.Y.</I> - In a series of strategic alliances with software partners, MasterCard International is laying the groundwork to offer corporations e-commerce options, perhaps as early as this summer.
In the latest development, MasterCard is teaming with EC Cubed Inc. of Wilton, Conn., to build an open, Internet-based data capture system for its corporate purchasing card. The companies plan to build a commercial card gateway through which purchase order details could be transmitted from any e-procurement software to MasterCard's purchasing card system. By matching the line-item details captured in the purchase process with the charges on the back end, MasterCard will finally be able to provide corporations with the robust reporting they've been demanding.
For those who don't already have a front-end e-procurement option--an electronic catalog--MasterCard has teamed with Microsoft Corp. and Clarus Corp. to market their integrated Internet-based corporate purchasing solutions.
MasterCard has been testing the solutions for its own purchasing for several months, and found that they slashed the average time required to fill a purchase order by 70 percent--from four days to one--and the cost to process each from $125 to just $40. The solution has been tested by 750 MasterCard employees, but soon will be rolled out to 2,300. Additional savings are expected as MasterCard integrates the purchasing solutions with its new enterprise resource planning system, which will replace several different back-office systems.
In the next few months, MasterCard also plans to pilot EC Cubed's ecWorks applications to serve as its commercial card gateway. If the data match-up goes according to plan, MasterCard will begin offering its member banks turnkey e-procurement solutions, which the banks in turn could offer their corporate customers.
While technically the huge data warehouse also might have applicability to solve the detailed data needs of the T&E card, Abrams said, the problem is that most corporations are putting travel applications on employee desktops.
"MasterCard is committed to developing innovative solutions in e-commerce," said Steve Abrams, senior vice president of U.S. Corporate Products. "We've found a technology approach that fits with our goal of offering a turnkey solution for Internet-enabled purchasing that delivers line-item data to corporate buyers without the need for merchants to invest in changing their payment infrastructure to accommodate the most detailed data processing."
Meta Group research analyst Kip Martin said, "The integration of buy-side e-commerce and payment solutions will be vital to the future of e-procurement initiatives. Companies pursuing e-procurement solutions will require both usable management reports and the ability to integrate their systems with those of trading partners if they are to effectively extend business processes outside the organization."
Electronic procurement is still at an early stage of development--with just handfuls of corporate implementations--yet Abrams believes adoption will occur at a rapid pace in the months to come. Thus far, most of the attention has been on the biggest corporations, but "you might be surprised how fast it happens in the middle market," he said of the transition from the physical to virtual world.