E- procurement at Cathay

Pacific Airways
Submitted By
Group 3
Agenda
What to expect when you go online with a
process?
About Cathay Pacific
Cathay Pacific and IT
Benefits gained by APD
Why CXeBUY?
Problem at hand
Alternative Available
Our Suggestion
What to expect when you go online
with a process?
Tangible benefits
Monetary Benefits
Time Saving
Efficiency Increasing

Intangible Benefits
Increased Satisfaction of stakeholders
Increased reliability of the process
Increased Value Creation
Greater Control
About Cathay Pacific
Founded in 1946, in the HKSAR
Announced the Best Airline in Asia
( Skytrax, 2001-2002)
Compete on product and service rather
than on price- The philosophy
Vision make Cathay the most admired
airline in the world
Cathay Pacific and IT
Internet related technologies investment -
$256 million over 3 years

E-Business initiatives expectations

Reduce total costs more than $30 million
yearly
Improve efficiency rather than to cut
staffing
Relevant benefits gained by
APD
Manage and control expenditure
Improve purchasing power
Provide spend and supplier information
Access to new suppliers
Easy integration
Back office
External (Oracle Internet Procurement)
Moving suppliers to the online space
Why CP is adopting CXeBUY?
To accomplish its vision of being Asias
leading e-business airline

Access to huge supplier information

Increase revenue and achieve cost saving

upto $30 Million
Reducing purchasing cost
Reducing inventory and carrying cost
Problem at hand
Is the timing appropriate for valuation of
tangible and intangible benefits of e-
procurement?

How to quantify the benefits of

implementation if we valuate?

Which financial metrics to use for

measuring the payback and ROI
deliverables?
Alternatives Available
To evaluate now or not?

Valuate at corporate level, department

level or process level.
 e-Procurement Valuation
now?
POINTS OF INTEREST POINTS OF CONFLICT
1. Would help the company 1. Too early to carry out such a
fully benefit from CXeBuy valuation

2. Would get figures to show 2. Overall impact cannot be

the beneficial effect of measured as modules not
CXeBuy on the Cathays complete
operation.
3. Testing will be inappropriate
at this stage

4. Require remodeling once

completely implemented
(for overall success of
project)
Department level/Corporate level/
Process level
Corporate level difficult as the project is
expanding to different departments

Department level Will not give true

picture of Projects success.
Implementation through Balanced
Score card
Reduction
Lead time from
in cost
of ordering
Reduction
Lead time from
in cost
of ordering
Why not to use balanced score
card
BSC assessment is at Organization level. But
its better evaluate CXeBUY at individual
process level

While BSC should be done for a stand alone

system, CXeBUY is a system in continuous
use, growing and improving all the time.

Deployment of resources required for BSC

which cannot be done at this intermediate
stage.
Our Suggestion

No valuation must be done at this stage as

it would not give us the true picture.
Thank You!!