ICT and e-Business Impact in the Retail Industry - empirica

e-Business in the Retail Sectororderings at Globus, the suppliers´ sales and logistic processes are much morestreamlined. Suppliers connected to the system do not need additional salespeople, that visit departments at Globus and present their offers. In addition, allindirect goods demanded by different departments within a store can be delivered inone go.It is difficult to quantify benefits and costs of the MRO e-procurement system due to therather unorganised way in which procurement of indirect goods was organised before thesystem was installed (comprehensive information on procurement costs prior to 2001 isnot available). In addition, it would be extremely difficult to retrace all time and effortassociated with the introduction of the e-procurement system in detail.Nevertheless, Globus management argues that the investment into MRO e-procurementpaid off quickly: procurement processes improved significantly, and cost reductionsthrough strategic buying activities are estimated to amount to a seven-digit number inEuros. Globus also profits from the fact that running costs, especially for maintenanceand support, are financed by connected suppliers. Thereby expenses incurred are notcharged, but rather compensated through improved terms and conditions.5.2.4 Lessons learnedThis case study illustrates how e-business technologies can positively contribute toprocess innovations and affect the way companies operate. At Globus Holding GmbH &Co. KG, the implementation of the e-procurement system has been the basis for acomplete re-organisation of processes related to the procurement of MRO goods. The e-procurement system helps to streamline and speed up the entire procurement process,including procedures related to invoice checking and controlling.Even more important, the system provides an appropriate basis for consolidating buyingpower and setting up favourable framework contracts with suppliers. Of course, theconsolidation of purchasing power improves the position of Globus when negotiating withthe suppliers of MRO goods. MRO suppliers, however, may also benefit from e-procurement systems as they can streamline sales and delivery processes. In this way,the e-procurement system drives process innovations at both Globus and its suppliers.The case study also illustrates some key challenges and success factors whenimplementing an e-procurement system. The impact of e-business technologies stronglydepends on a number of environmental factors. For example, it turns out that e-procurement projects go far beyond the pure installation of a technical system: thesystem is only as convenient as the underlying organisational processes. Thus, muchtime and effort is needed for the re-organisation of processes before the system isinstalled. Another important point raised is the continuous need for adjustment andimprovements in order to ensure an efficient use and the acceptance of users. Thesepoints should be taken into account when discussing the impact of e-businesstechnologies. They might explain, why similar technologies used in similar companiesmay lead to very different outcomes.5.2.5 ReferencesResearch for this case study was conducted by Dr. Andreas Stiehler and Timo Zumbro(Berlecon Research) on behalf of the Sectoral e-Business Watch.135