Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

E-procurement guinea pigs fret over security and cost

A study into government e-procurement has found concerns over security and integration risks must be addressed before agencies jump on the e-commerce bandwagon.

The study, which names individual vendors, was conducted by the Australian Government Information Management Office and examines value propositions and outcomes of four government e-procurement trials.

The lucky participants were the Australian Broadcasting Corporation (ABC), Australian Antarctic Division (AAD), Special Broadcasting Service and the Commonwealth Scientific and Industrial Research Organization.

While concluding that e-procurement increases efficiency within the government's gargantuan purchasing power, the study also found agencies are not prepared to take at face value vendor promises about security or integration costs.

Particular concerns were raised by SBS which found external B2B connectivity a sticking point. The broadcaster tested a Web-based system for creating and approving electronic catalogue requisitions through an Oracle iProcurement module, delivered as an upgrade to SBS's existing Oracle Financials 11i system.

"SBS also explored the potential for B2B connectivity between the Oracle Exchange and suppliers. The Oracle Exchange system was successfully tested and configured for this purpose. Technical and security constraints meant this portion of the trial was limited to the Oracle test environment.

"SBS experienced issues with security constraints when trying to implement direct B2B connectivity with suppliers. The core SBS internal network is used to support the transmission of digital radio and television signals, which means it is vital to protect the network from any failure or security breach.

These security requirements took priority over the e-procurement needs, so external suppliers could not access the Oracle system to receive and send [purchase orders] and invoices," SBS' contribution to the study states.

Computerworld has contacted Oracle for comment but had received no reply by publishing deadline.

The ABC was also playing it safe on the B2B front, choosing the safe harbour of an externally hosted mySAP Enterprise Buyer Professional module rather than risk experimenting with its core SAP R/3 system.

While the externally-hosted SAP trial went well, with the ABC now scoping out an enterprise-wide e-procurement solution, Aunty reserved judgement on how costs of a fully integrated SAP B2B system should add up.

"Overall, the ABC was pleased with the success of the trial and the future potential of e-procurement within the Corporation...Actual implementation details may differ from the trial depending on the business case justification in that some components may be run in-house rather than hosted externally," the ABC stated.

Government IT enforcer and Special Minister of State Eric Abetz stressed the need for agencies to get maximum value from their e-procurement programs - and the vendors delivering them.

"When implemented well, e-procurement delivers transparent, well controlled and documented procurement processes...which is very valuable information for managing a government agency's total spend," Abetz said.

The case studies are available at www.agimo.gov.au

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: ABC, Australian Antarctic Division, Australian Broadcasting Corporation, Commonwealth Scientific and Industrial Research Organization, Enterprise Buyer, Oracle, SAP, SBS

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Whitepapers
Latest Stories
Community Comments
Latest Blog Posts
Whitepapers
  • The Case for Real-Time Networking
    CIOs are facing several powerful trends and inflection points that are defining the new IT landscape, including cloud computing, virtualization, the consumerization of IT, smart computing, and communications to collaboration. Taken individually, each one of these trends will have significant ripple effects throughout the planning and operations of IT network infrastructure. In aggregate, they will have an even more dramatic impact on the way that future network architectures need to be planned and designed. Read on.
    Learn more »
  • Best Practices for Implementing a Data Warehouse on the Oracle Exadata Database Machine
    Increasingly companies are recognizing the value of an enterprise data warehouse (EDW). A true EDW provides a single 360-degree view of the business and a powerful platform for a wide spectrum of business intelligence tasks ranging from predictive analysis to near real-time strategic and tactical decision support throughout the organization. Ensuring the EDW will get the desired performance and will scale out as your data grows you need to get three fundamental things correct, the hardware configuration, the physical data model and the data loading process. Read on.
    Learn more »
  • The State of Data Security
    Recognize how your data can become vulnerable, including the latest issues stemming from unprotected data on mobile devices and social media sites. Understand the compliance issues involved, and identify data protection strategies you can use to keep your company’s information both safe and compliant.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Recent comments