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A comparative analysis of product classification in public vs. private e-procurement
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Dr Gregory Maniatopoulos
Leukel J, Maniatopoulos G
Electronic Journal of e-Government
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There is a growing consensus that e-Procurement is the single most important area of development in the B2B e-Commerce arena. Within a public sector context, e-Procurement has been widely embraced by governments seeking the administrative and cost reductions experienced in the private sector. As a result, a number of ‘proven’ private sector e-Procurement solutions such as e-marketplaces, desktop purchasing systems, and tendering platforms have been employed by various public sector organizations. Public e-Procurement, however, differs from the private sector in various aspects mainly because of its economic and social considerations. These differences result in a number of specific regulations and standards that have been developed for public e-Procurement. One group of these standards addresses how to classify and describe products being the object of all procurement activities. While standards for product classification play an important role for establishing a shared and common understanding of a pro duct domain, there is still no over-arching standard for both public and private e-Procurement nor do competitive standards in these two sectors agree on common concepts, exchange formats, data models, standardization processes, and intellectual property rights that could all contribute to semantic interoperability. This paper reports on the methodology and results of a comparative analysis of product classification and respective standards in public vs. private e-Procurement. Based on a literature review, we define criteria for assessing the current state of product classification standards. The in-depth analysis of two representative standards reveals fundamental differences and shortcomings with private sector standards being more sophisticated. The gap can partly be attributed to different objectives and priorities between private and public sector organizations. Product classification in the public sector is primarily an instrument for tendering processes and inter-organizational spend analysis where as classification in private e-Procurement refers to e-Ordering processes and intra-organizational procurement optimization. Our findings improve the understanding of product classification with regard to both sectors, and may help standards makers in developing extended, closer integrated, or at least harmonized standards, especially for public e-Procurement.
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