Citigroup Inc.'s e-Citi unit is joining the business-to-business marketplace by pairing up with E-commerce software vendor Commerce One Inc. to build an online marketplace for corporate buyers.
The e-Citi unit will use Commerce One procurement software in the new Citibank Procurement Connection portal, which will host vendor catalogs, provide auction capabilities, and sell specific applications for vertical industries, including pharmaceuticals and telecommunications. The portal also will offer financial features such as immediate online executable currency exchange rates, financing, digital certificates, electronic business-to-business bill payment and presentment, and electronic payments linked to a company's accounts-payable processing.
Citigroup will become the primary financial services provider on the Commerce One global trading portal, giving it access to a large number of potential clients.
Denise McLaughlin, e-Citi VP, says the decision to launch a buying portal was driven by requests from global companies that wanted help with the procurement process from an independent party. "Companies are concerned about maintaining privacy over their pricing data," she says. "A supplier doesn't want buyers to know that they're getting different prices."
McLaughlin said the portal will launch once testing and security measures are completed. In addition to corporate buyers and vertical industries, the portal will also serve government agencies.
One industry consultant expects more purchasing portals to be created to serve vertical markets. "Everyone has cost-reduction pressures, and finding ways to reduce costs on purchased goods and services that are not directly related to the company's core product will have a significant impact on a company's spending practices," says Mike Fatch, KPMG's managing director for E-purchasing in consumer and industrial markets.