Philamlife signs up with BayanTrade for buying program

The Philippine American Life & General Insurance Co. (Philamlife) recently signed up with comprehensive business-to-business emarketplace BayanTrade to consolidate common procurements among its member companies.

This, as the research group International Data Corp. (IDC) projects emarketplace services to grow 27 percent annually from $5.2 billion last year to $17 billion in 2005, with eprocurement’s share of the total supply chain globally expected to reach 20 percent by 2004.

BayanTrade, currently chaired by Ayala Corp. chief executive officer Jaime Augusto Zobel de Ayala II, was organized by six of the country’s leading business conglomerates: Ayala Corp., Benpres Holdings of the Lopez group, Philippine Long Distance Telephone Co., JG Summit, Aboitiz Equity, and United Laboratories.

BayanTrade has so far generated revenues amounting to P700 million in just four months of actual operations. It has also helped its member-companies realize savings of over P70 million and has successfully conducted over 60 e-bidding events, which according to Zobel, is comparable to the B2B exchanges in North America.

The Philam Group of Companies is comprised of Philamlife, Philam Plans, Philam Care, Philam Properties, Philam Asset Management, Philam Savings Bank, Philam Insurance, and AIG Credit Card.

Philamlife MIS first vice president Dod Peralta said that the decision to sign up with the BayanTrade marketplace was prompted by the opportunity to significantly reduce costs. "Just the requisition of MRO (maintenance, repair and operations) supplies and other non-core products will provide significant cost savings from reduced overhead expenditures and improved administrative processes. For capital expenditures, we are also looking into e-Bidding."

Peralta said the arrangement with BayanTrade involves more than purchase requisition. "BayanTrade has an understanding of the procurement process which allows them to go in and offer a process substantially more sophisticated than simple purchase requisition. They also offer a workflow component for procurement that gives us the opportunity to shamelessly integrate our backend systems with e-Procurement. This will provide not just savings but a more efficient, productive organization."

The timing for the relationship is excellent, according to Peralta. "BayanTrade may be young, but I expect the sophistication of our own purchasing and procurement needs to be growing along with them," said Peralta.

He also appreciates the eMarketPlace’s focus on the bottom line and the practical demands of doing business. "I think BayanTrade’s leading edge is that it has a practical business approach toward its customers and their needs. Leading-edge technology is nice but what’s important is what works in the marketplace."

Peralta said that an example of BayanTrade’s foresight is the aggregate buying process it proposed to Philamlife. "Philamlife’s requirements for certain commodities, like paper, are common to the Philam Group. BayanTrade’s e-Procurement and e-Bidding services allow us to aggregate our purchases, making deeper discounts possible. The fact that we can aggregate bids across companies, including non-Philam Group companies, is exciting and tells me that the people in BayanTrade know their business."