SourcePilipinas: E-procurement for all companies

Business for 2002 is brisk for SourcePilipinas. With a membership of over 790 active trading partners, SourcePilipinas managed an astounding membership growth of 135 percent from the whole of 2001.

"Our marketplace administrator is tasked with cleaning and updating our database weekly, so we only retain the companies which have transacted with us within a three-month window," Christine Yap-Tan, chief operating officer of SourcePilipinas, says.

The growth figures are even more encouraging since membership was free last year. "Our trading partners – both buyers and suppliers – see the value that SourcePilipinas membership brings, and appreciate the reasonable transaction fee and monthly dues," Yap-Tan says.

"Our fundamental principle is cost savings, and it begins at home. SourcePilipinas, along with the Yapster group of companies, uses the system to procure goods, translating not only into bottom line savings, but also into the most efficient manpower complement, low overhead costs, and consequently, less expenses," she says.

"This means we can charge trading partners lower fees and welcome companies of any size, large or small," she adds.

More transactions

With increased membership came increased transaction volume. SourcePilipinas has put through more than 6,800 transactions. "For the first nine months of 2002, we have experienced more than 200 percent growth in the number of transactions versus the total number of transactions coursed through SourcePilipinas during the same period last year. Transaction value likewise quadrupled during the same comparative period," Yap-Tan says.

Signing up trading partners was effortless for SourcePilipinas. "The idea of generating savings and streamlining processes was attractive to many buyers. Suppliers, on the other hand, welcomed the increased exposure without the added marketing costs," she says.

"Within the first quarter of this year, we reached our target of 500 members," she says. However, it took a few more months to get the members to migrate a greater portion of their purchases onto the system. For some, making the change was tiresome, others were already happy with their initial savings, and more than a few did not fully comprehend the concept of e-procurement.

Cost savings

The key to SourcePilipinas’ exceptional performance is its ability to deliver on its promise of cost savings for both buyers and suppliers. Buyers have saved as much as 63 percent on procured goods and services vis-a-vis traditional procurement processes. The average savings range between 18 and 32 percent.

SourcePilipinas buyers can reduce the search time needed to find new suppliers, gain the ability to request and receive multiple quotations, and negotiate volume discounts, thus reducing transaction costs.

Registered buyers gain access to a growing roster of suppliers of products and services for indent items from pine logs and chemicals, gasoline and oil derivatives, insurance and various maintenance services, to computer equipment and general office supplies. SourcePilipinas suppliers, on the other hand, are able to reduce their marketing and customer retention costs and, at the same time, widen their client reach. Furthermore, the use of the Internet allows for improved customer service.

Seamless transition

Companies’ transition to e-procurement is easy and seamless through SourcePilipinas. "We have created a venue for buyers and suppliers to meet and transact with each other – in cyberspace," Yap-Tan elaborates. "With the simple use of an Internet browser, companies are able to save time, effort and money in their procurement system."

SourcePilipinas has come a long way since its inception in September 2000. "That is expected of any pioneering business," Yap-Tan says. "When we launched, we were prepared to undergo a period of education and indoctrination on e-procurement. It was a great boost to Philippine business that the government and the media highlighted e-procurement enough to make it the latest business buzzword."

SourcePilipinas’ end-to-end involvement within the procurement cycle enables participants to benefit from simpler and more efficient procurement processes, wider contact base, quicker processing time, and updated catalogue information.

"Even with the increased publicity, we realize that for many companies, e-procurement is still a new concept. Education is of utmost importance to us, more in the area of e-procurement processes than website functionality. We take time to understand each company’s current business practices and offer recommendations best suited for them," Yap-Tan says.

"It is a steep and continuous learning curve both for us and for our trading partners, and admittedly, the path is rarely smooth. But we learn a lot from our trading partners, and hopefully they learn a lot from us too," she adds.