E-Mall's Open: Will Shoppers Come?
- By Brian Robinson
- May 01, 2000
When Massachusetts launched the E-Mall pilot in 1998, it promised to revolutionize
procurement by combining the purchasing power of states to cut costs. It
was successful enough that Massachusetts has made the pilot permanent.
But the question is: Will other states sign on?
Lack of money, doubts about how the pilot will scale and the increasing
availability of ready-made commercial alternatives have cast doubt on the
future of a multistate system.
"We have opted not to continue with the E-Mall," said Jan Cox, administrator
of the division of purchasing for Idaho, which participated in the pilot.
"Our share of the cost of the E-Mall as a partner would have been upwards
of $200,000, according to figures Massachusetts provided to us. And it would
not have helped us with the order-processing side of things, which is what
we have been trying to organize through automating our procurement process."
Instead, Cox said, his office is looking at using a system by Syscom
Inc. for that automation, one that will cost just $20,000 upfront and $1,500
a year thereafter. The system is being tested now and could be up and running
by the end of June.
"We certainly appreciated the speed of order processing that the E-Mall
provided vs. our old paper-based process, and our experience with the E-Mall
did give us a better understanding of what we needed in an electronic procurement
system," Cox said. "But, in the end, the projected cost of the E-Mall was
the swing factor."
Other participants in the pilot were Utah, Texas and New York. They
all have opted out of the production E-Mall, at least for now. And Texas
has confirmed it will be going with a commercially available electronic
In the end, the E-Mall may end up having been its own worst enemy. When
the pilot began in early 1998, state governments were only generally thinking
about electronic procurement. The E-Mall showed them what was possible.
In the meantime, it also prompted a growth in commercial and cheaper
"There are a lot of private solutions out there now that are cost-effective,"
said J.D. Williams, Idaho's state controller and chairman of the National
Electronic Commerce Coordinating Committee. "And cost is a major influencer
of people's thinking. When it comes to electronic commerce, there are not
a lot of extra funds available for states to spend. Legislatures tend to
say that "you must do with what you have.' "
And even though the pilot answered some of the major questions about
e-commerce, it also created hurdles that people felt the E-Mall would have
to overcome, Williams said.
Effort was needed to get through each of the participant's security
firewalls, so there were significant technology issues on that score. And
the pilot "seemed to show that the Open Buying on the Internet [OBI] structure
was not very stable," Williams said. OBI is a standard that enables multiple
parties to take part in Internet-based transactions, regardless of what
computing platform they use.
In March, Massachusetts awarded a contract to build the production version
of the E-Mall to Intelisys Electronic Commerce Inc., whose off-the-shelf
solution was used to provide most of the e-commerce functionality for the
pilot. One of the major efforts will be to link the front-end ordering processes
of the pilot with the state's back-office legacy systems including financing
After that, the focus will be on getting state agencies onboard as well
as convincing other cities and jurisdictions in Massachusetts and other
states that working through the E-Mall will be to their benefit. All 154
of the state's executive agencies will be required to use the E-Mall for
their procurements, according to Nancy Burke, the E-Mall's project manager.
Others will have to be persuaded to join.
With no partners interested in helping to fund construction of the E-Mall although Burke said that option "will be kept open for the future" income
will come from the transaction fees Intelisys will charge suppliers for
each order that goes through the system.
"The message now for other states, cities and counties is that there
is a simple purchasing solution available to them, no matter how sophisticated
they are about [e-commerce]," said Joe Quigg, vice president for government
sales at Intelisys. "We can provide them immediately with a free service
that will allow them to buy from other states' contracts over the Web, if
that's what they want. It wouldn't be a front-to-back integrated system,
but it would allow them to buy a large part of their requirements through
the E-Mall site."
Intelisys was to begin installing the production version of the E-Mall
in the middle of April, according to Quigg.
The E-Mall will have competition from companies selling end-to-end
integrated e-commerce systems and from companies offering services along
a similar aggregate purchasing model the E-Mall is trying to exploit.
American Management Systems Inc., for example, introduced earlier this
year its Buysense.com World Wide Web site, a subscription-based service
where users pay only when they use the service to make a procurement. The
intent, according to Gary Lambert, a senior principal at AMS, is to attract
a buyer community to the Web site and then bring the top suppliers in to
work with that community.
"We believe there is still a big interest in collaborative procurement,"
said Lambert, who previously was deputy state purchasing officer for Massachusetts
and a prime mover in the multistate E-Mall. "But there is no interest in
having just one person manage it. So our aim is to find ways to facilitate
buying over the Internet and to make it accessible to people."
The major drive eventually might come from the suppliers as they see
procurement happening via the Web, Lambert said, because they are being
pressured now to pick the right platforms through which to do their business,
"and they can't do it through numerous separate platforms for each government
they do business with."
But Lambert also said that the E-Mall, AMS and others are only at the very
beginning of e-procurement. "We are still mostly working with people just
to describe to them what this new economy is all about," he said.
What is certain is that the pace at which governments are trying to
move their procurement systems into the electronic universe is quickening.
It's not so much years but months down the road that they are looking to
be doing business electronically.
Utah, another participant in the E-Mall pilot, also has decided not
to go with the production version, "but that hasn't dampened our desire
to move into an e-procurement environment," said Douglas Richins, director
of Utah's department of administrative services. "We do have plans to begin
looking at how to do that, as do most states, and we want to move rapidly.
It all depends on the cost."
Robinson is a freelance journalist based in Portland, Ore.
Brian Robinson is a freelance writer based in Portland, Ore.