By Robert M. Frederickson August 13, 2003 | THE RESEARCH COMMUNITY was an early adopter of Web technology, and life science researchers became an early target of its commercialization. By the late 1990s, a number of Web portals devoted to the life sciences had emerged, such as bio.com, biospace.com, and biocompare.com. The premise behind these portals was to create a network to facilitate e-commerce in the life sciences. In practical terms, the sites were aggregators of product or company information, often with links leading to sites where products or services could be ordered. Rather than flipping through stacks of catalogs, research consumers could browse products and companies online — although they would still have to go through their institution's standard requisition procedures to make purchases.
SciQuest came on the scene in 1995, followed by Chemdex in 1997, with the aim of taking the next logical step of facilitating the actual purchase online. These groups created a business-to-business marketplace. The goal was to aggregate fragmented communities of buyers and sellers of life science and research products, with the hosting company taking a small cut of each transaction.
Chemdex shut its doors in late 2000, and SciQuest shifted gears. SciQuest learned during its early years that many research organizations wanted to replace their arcane and cumbersome sourcing and purchasing systems — and to enable e-procurement. In response, SciQuest reconfigured its e-marketplace and became a hosted software provider of procurement and materials management systems for research-oriented institutions. Essentially, SciQuest customized its global marketplace to fit the sourcing and supplier specifications of individual organizations and integrated e-procurement functions so that it could manage its purchasing procedures through the system.
The response has been positive. SciQuest's SelectSite is now used by more than 25 leading research organizations, including GlaxoSmithKline, Memorial Sloan-Kettering Cancer Center, and Corixa. It is essentially a supplier catalog management package for research-based organizations that wish to manage more closely the procurement processes throughout the organization, with the aim of increasing purchases from contract vendors. The system also facilitates record keeping and analysis of spending.
Easy Comparison Shopping
Once configured by the purchasing department, the package enables organizations to influence buying behavior while still allowing the purchaser a choice of vendor. This configurability is key to the system's success, according to Jamie Duke, SciQuest's chief operating officer. "A user has the ability to choose from products from any of the suppliers whose catalogs are hosted on the system, but products from particular suppliers can be promoted due to the configuration of the search function," Duke says.
| Let's make a deal: SciQuest's SelectSite can be configured to steer buyers toward vendors that offer better bargains.
If an organization has a volume contract with a particular supplier, that supplier's product can be configured to appear first in the search results. "The beauty is that it's all done behind the scenes," explains Daniela Trombino, purchasing manager at Enanta Pharmaceuticals, which has been using SelectSite for more than a year. Enanta belongs to the Massachusetts Biotech Council (MBC), which has negotiated agreements with suppliers based on its members' $40-million purchasing power. "By setting buttons on the system, I can enhance contract compliance by our staff and reduce spending," Trombino says. She estimates that Enanta has saved 10 percent to 25 percent, depending on the commodity, so far.
Another benefit of SelectSite is the ability to directly compare prices of similar products across a wide spectrum of vendors. "I no longer have to go through the tedious process of flipping through individual paper catalogs to obtain product information or to compare prices," Trombino says.
This ease of price comparison can also provide the client leverage to negotiate better deals. In fact, when Enanta examined what it was paying for office supplies, it realized that Office Depot offered lower prices than a supplier under contract with the MBC, and the Council is now negotiating a supply agreement with Office Depot.
While the current SciQuest catalog is relatively comprehensive — 3 million products from 1,000 suppliers — the client can add vendors to the system. Catalogs can be hosted or linked via a "punch-out" — essentially, a link to the supplier's site. "Punch-out is a great option for organizations that use just one supplier to cover the majority of spending in a particular commodity," Duke says. "If you purchase all of your computers from Dell, using a punch-out would allow you to take advantage of the configuration options available on Dell's Web site, while still benefiting from SelectSite."
Nevertheless, the system retains its one-stop-shopping nature. If the user punches out to a supplier catalog, he or she still jumps back to the SciQuest site to complete the order. Again, the system is highly adaptable; it can be configured to match the purchasing instructions, workflow, and approval process of a particular organization.
Indeed, procurement automation is a key component of the system. SelectSite includes all aspects of an order, from delivery of a requisition to virtual cart management, from routing for purchase approval to settlement of an order.
Robert M. Frederickson is a biotech writer based in Seattle. He can be reached at email@example.com.