Already, that higher value role is delivering a bottom-line benefit. The company is on track to achieve a 10 percent reduction in its annual purchase spend of $32 million. It is, points out Hammond, "a very sizeable return on our investment." In addition, the plan is to grow the business by 6 percent to 8 percent this year, but without hiring any more purchasing agents. Previously, the size of the business and the purchasing function pretty much moved in lockstep.

The New Tools

E-procurement used to be about dealing with low value, repeatable items that clog up your purchasing function," says Prasad Hedge, a partner with Denali Consulting. "Over the past couple of years, the tools have started to become more collaborative and not just transactional."

MSX International, an $800 million business specializing in providing supply chain management and procurement services to the global automotive industry, is using newly available collaborative technology from Commerce One to buy items and services as varied as printer cartridges and contract labor for its automotive customers. The company issues RFPs (accompanied by CAD drawings and specifications),solicits bids and responds to suppliers' requests for additional information - all over the Web.

"It's the electronic equivalent of a bidding conference, using the Web to interact with a greater number of suppliers," says Troy Gazette, director of IT platform strategies for MSX. Answers to suppliers' questions can be broadcast to the entire pool of vendors, or not, depending on the automotive customer's own preferences.

Applying optimization technology to procurement is another area that is hotting up, especially with multi-item lots. "Run a buy through an auction, and you might get an 8 percent savings. Run that same buy through an optimization engine, and you'll get another 8 percent," asserts John Fontana, a principal with sourcing and supply chain management company Tigris Consulting.