XML finding a place in Web procurement

Businesses are starting to look to XML to reduce procurement costs when buying indirect goods over the Internet, and developers stand to benefit.

Two companies have joined forces in an attempt to lead Extensible Markup Language (XML) into Internet procurement: Commerce One, a developer of electronic-commerce procurement systems that link buyers and suppliers in a real-time trading community, and Veo Systems, a developer of XML-based products for trading-partner networks.

Early next year, Veo's technology will become part of an existing Commerce One extranet product called the Commerce Chain Solution. That product includes BuySite, a program that automates the procurement process from requisition to order, and MarketSite, software that automates supplier interactions from order placement to payment. Commerce One said the integration of XML into its electronic-commerce network will speed up the indirect goods and services supply chain, thus helping companies reduce operational costs and increase efficiency.

The use of XML will "crank the procurement process up a notch", said Chrys Varnes, director of Los Angeles County's Countywide Acquisition Management Information System (CAMIS) project.

Varnes said the addition of XML to Commerce One products should bring the county closer to its procurement-savings goals. Because of XML's ability to define products, buyers can quickly identify the right products at the right price through suppliers' online catalogues.

The county, which expects to have the Commerce One product running by October, spends $US70 million annually on goods for many sectors, ranging from health care to highways.

The CAMIS project aims to reduce inventories, which Varnes said can be as high as 17 per cent per item.

Online catalogues are the first applications taking advantage of XML.

"XML gives buyers access to a common ground," said Mary Laplante, an analyst at Fastwater, a US-based consultancy.

Because XML gives definition to text, products can be categorised, which helps buyers when searching online.