Description
This is document describes about e-business suite at cathay pacific.
Case Analysis- e-procurement at Cathay Pacific Airways Problem Cathay pacific has invested in CXeBuy for procurement of non technical items which can be catalogued. The catalogued items removed ambiguities over part standards and item definitions. Now Cathay pacific wanted to invest $256 million further in over 30 e procurement initiatives like website, cargo website, and an investment in e-market place Aeroxchange jointly with 12 other carriers and increasing the scope of procurement to non inventory contractual spend items. Questions were being raised regarding the actual value of investment in such e procurement initiatives. The problem is to define a method to value an initiative like e procurement strategy. Analyses The current CXeBuy is built on Oracle platform and it has integrated all the legacy procurement systems in to it. The oracle platform is flexible and can be easily integrated with external e market places like Aeroxchange and MartPower. Hence it is a value addition for Cathay Pacific Airways. They were the pioneers in e procurement in the airlines industry. The measurement exercise would be a futile exercise as the true valuation of the investment in e procurement cannot be measure. A balanced score card method can be adopted but it will not be able to pin point the exact amount of savings in financial terms. The suggestion to measure the benefits on a departmental level also seems futile as there would be no aggregation of cost savings to the whole company. It is also stated that any attempt to value the e- procurement initiatives would be thought of as a staff cutting exercise by the employees. Hence this could be detrimental for the morale of the employees and also the relationships between employees and the management. Exhibit 10 clearly shows a decrease in the transaction cost involved in procurement and also the time take to process the transaction. Hence the company should continue investing in e procurement initiatives
doc_792408727.docx
This is document describes about e-business suite at cathay pacific.
Case Analysis- e-procurement at Cathay Pacific Airways Problem Cathay pacific has invested in CXeBuy for procurement of non technical items which can be catalogued. The catalogued items removed ambiguities over part standards and item definitions. Now Cathay pacific wanted to invest $256 million further in over 30 e procurement initiatives like website, cargo website, and an investment in e-market place Aeroxchange jointly with 12 other carriers and increasing the scope of procurement to non inventory contractual spend items. Questions were being raised regarding the actual value of investment in such e procurement initiatives. The problem is to define a method to value an initiative like e procurement strategy. Analyses The current CXeBuy is built on Oracle platform and it has integrated all the legacy procurement systems in to it. The oracle platform is flexible and can be easily integrated with external e market places like Aeroxchange and MartPower. Hence it is a value addition for Cathay Pacific Airways. They were the pioneers in e procurement in the airlines industry. The measurement exercise would be a futile exercise as the true valuation of the investment in e procurement cannot be measure. A balanced score card method can be adopted but it will not be able to pin point the exact amount of savings in financial terms. The suggestion to measure the benefits on a departmental level also seems futile as there would be no aggregation of cost savings to the whole company. It is also stated that any attempt to value the e- procurement initiatives would be thought of as a staff cutting exercise by the employees. Hence this could be detrimental for the morale of the employees and also the relationships between employees and the management. Exhibit 10 clearly shows a decrease in the transaction cost involved in procurement and also the time take to process the transaction. Hence the company should continue investing in e procurement initiatives
doc_792408727.docx