MCI WorldCom is sold on e-commerce

After agreeing in August to host on-line catalogs for electronic purchasing service Commerce One, MCI WorldCom will deepen that relationship and put its brand name on the company's automated Internet purchasing service.

The partnership, called Internet Procurement Automation, will link Commerce One with both MCI Systemhouse, the company's systems integration subsidiary, and UUNet WorldCom, its Internet service provider. MCI WorldCom has taken an equity position in Commerce One and will place MCI Systemhouse President and Chief Operating Officer Scott Ross on the company's board of directors.

Internet Procurement Automation will allow businesses to automate purchases of their "non-productive" goods and services-items not directly involved in manufacturing their products. According to Ross, the amount of time and money most companies spend processing these routine transactions is "tremendous-$250 billion just on overhead associated with processing purchasing-related documents."

By organizing these purchases and using Commerce One's aggregate on-line catalog to find the cheapest vendors, companies can cut the costs of these purchases, said Commerce One CEO Mark Hoffman. Companies using the service can expect to reduce inventory levels by 10% and cut the total cost of goods purchased by 5% to 10%, he added.

For each transaction, Commerce One receives a fee ranging from 25 cents to $2.50, depending on business volume. Commerce One's software consists of BuySite, a Web-based desktop application that automates the requisition-to-order process, and MarketSite, a link that automates interactions with suppliers.

MCI WorldCom chose Commerce One for the project partly because its on-line catalog combines the inventories of multiple vendors and includes real-time price quotes and product availability data, Ross said. "Such capabilities are a requirement for creating a virtual shopping environment for business," he said.

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