Electronic procurement system and method for trading partners

We claim:

1. Electronic Commerce System for procuring goods/services by a plurality of users within a custom organization, comprising

(a) a plurality of terminals;

(b) a customer server connectable to each of said terminals and including log-on means for providing access to said customer server to a user by means of one of said terminals only if the user can be properly authenticated for a predetermined level of purchasing authorization;

(c) a supplier system including a supplier catalog server for storing data representing a supplier catalog of goods/services that are available for purchase by authorized users in the customer organization, and a supplier processor server for processing orders received by the authorized user within the customer organization, said supplier system being directly accessible to said customer server through an internet connection; and

(d) security means provided within said servers which limit transactions to customers and suppliers who have pre-arranged relationship for displaying selected supplier catalog information to a user within said organization, consistent with said predetermined level of authorization, for issuing a purchase order by the user to said supplier system, and issuing an invoice by said supplier system to the customer organization after goods/services have been delivered to the user.

2. System as defined in claim 1, wherein said terminals are connectable to said customer server by means of a LAN network.

3. System as defined in claim 1, wherein said terminals are connectable to said customer server by means of an Intranet connection.

4. System as defined in claim 1, wherein said customer server includes means for defining the level of authorization for the approval of acquisition of goods/services by a user logged on to said customer server, said level of authorization also defining pre-selected goods/services that the user has available for viewing from said supplier catalog.

5. Suppler System as defined in claim 1, wherein said customer server is provided with means for linking said customer server with a purchaser legacy system.

6. Supplier System as defined in claim 1, wherein said customer server output data format and bank server input data format are compatible and said customer and bank servers are directly coupled to each other over an Internet connection.

7. Supplier System as defined in claim 1, wherein said customer server output data format and bank server input data format are incompatible, and further comprising a clearing house gateway between said customer and bank servers for translating said output data format to be compatible with said input data format.

8. System as defined in claim 1, wherein said supplier system includes a supplier legacy catalog, said merchant catalog server including means for accessing said supplier legacy catalog to make same accessible for viewing by said users in said customer organization.

9. System as defined in claim 1, wherein said supplier system includes a supply legacy system, said supplier processor server including means for accessing said supply legacy system.

10. System as defined in claim 1, further comprising counting means at a service bureau for counting the number of purchase orders issued by said customer server to said suppler system, whereby said service bureau may be compensated for hardware, software and/or services in the use of the system.

11. System as defined in claim 1, wherein said customer server, supplier system and bank server, supplier system and bank server Internet connections use at least one of the following electronic exchange protocols: EDI (ANSI and EDIFACT), OBI (open buying on the Internet), S/MIME, MIME, SMTP, HTTP, and TCP/IP.

12. Electronic Commerce System as defined in claim 1, wherein further comprising a bank server accessible by said customer server through an Internet connection for payment to said supplier for the procure goods/services upon receiving instructions to make payment by said customer server.

13. Systems as defined in claim 1, further comprising a certificate authority for uniquely authenticating customer and suppliers to each other, whereby secure connections to exchange information and documents.

14. System as defined in claim 13, wherein said certificate authority comprises means for generating public/private keys unique to each buyer and supplier to enable encryption/decryption, authentication and integrity of all communications and/or messages transmitted between said customer server and said supplier system.

15. Electronic Commerce System for procuring goods/services by a plurality of users within an organization, comprising user hierarchy-based communication system for

(a) a supplier computer system including a supplier catalog and an order processor, said supplier catalog containing information regarding all of said supplier's goods/services and a specific profile for the purchasing organization;

(b) a procurement computer system including a plurality of terminals for use by a plurality of users within a purchasing organization each assigned an organization user profile which specifies a level of authorization for approval of the acquisition of goods and/or services from at least one predetermined supplier of goods, said procurement computer including means for displaying pre-selected goods/services on a terminal available for acquisition from said at least one supplier consistent with the user's level of authorization for the acquisition of goods/services from said supplier;

(c) a communication link for selectively accessing, for downloading by a user, selected information from said supplier catalog to the user's terminal to said procurement computer and the supplier system being programmed to establish a cryptographically secure session for ordering and filling an order of goods/services, by means of said order processor, from said supplier, only when an authorized user seeks to acquire one or more products/services which the user is authorized to purchase.

16. Method of procuring goods/services by any one of a plurality of users within a customer organization from a supplier, comprising the steps of:

(a) logging on by a user on a terminal to a customer server at the customer organization;

(b) authenticating the user as a valid user;

(c) connecting the user to a supplier catalog over the Internet and displaying selected goods/services on the user terminal consistent with the user's authorization profile established by the customer authorization;

(d) completing a requisition request by the user selecting the products/services the user wants to purchase;

(e) sending the requisition requests to the customer server and checking the request against the user's purchasing authorization limits; and

(f) creating a purchase order for the supplies only if the user's purchasing authorization limits are not exceeded.

17. Method as defined in claim 16, wherein the user is connected to the customer server by means of an Intranet connection.

18. Method as defined in claim 16, further comprising the step of sending a message to the user's designated supervisor to approve, alter or cancel the requisition request where the user's purchasing authorization limits have been exceeded.

19. Method as defined in claim 16, further comprising the step of translating purchase orders into ANSI EDI formats prior to sending them to a supplier.

20. Method as defined in claim 16, further comprising the step of creating an electronic invoice by the supplier for the user.

21. Method as defined in claim 16, further comprising the step of establishing requisition templates that can be used by one or more users to speed up and simplify the requisition process.

22. Method as defined in claim 16, further comprising the step of paying the supplier directly from a bank by using the bank's automated clearing house (ACH) payment service when the bank is instructed to make such payment by the customer organization.

23. Method as defined in claim 16, further comprising the step of counting the number of purchase orders sent by the customer organization to the supplier to establish a service fee payable to the customer organization for the use of the system.

24. Method as defined in claim 16, further comprising the step of encrypting purchase orders prior to sending them to a supplier.

25. Method as defined in claim 24, further comprising the step of initiating a secure synchronous connection to each supplier's transaction gateway.

Description Submit all comments and votes

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention generally relates to electronic commerce systems and, more specifically, to a procurement system and method for trading partners which enables a plurality of users within a purchasing organization to procure goods/services from pre-arranged suppliers, consistent with the level of authorization given to each user and enables automated payments to the supplier by a bank after the goods/services have been delivered.

2. Description of the Prior Art

In any business, and particularly within large organizations having hundreds or even thousands of employees, the procurement of "non-production" or "non-custom" products and services in high volume is generally a time consuming process and a costly one. In various industry surveys, companies cite the costs of processing a requisition and a purchase order as anywhere between $25 and $300; a cost that often exceeds the value of the goods being ordered.

Ordering of non-production goods in high volumes, such as office supplies and desktop hardware, can be a time-consuming and expensive process for suppliers as well. For example, suppliers have to be increasingly competitive in today's market as their customers are constantly seeking immediate turn-around on orders and better overall customer service. However, suppliers find that the process of phone or paper purchase orders is costly because of the administration associated with order processing, can cause delays in order fulfillment, and is prone to errors. Additionally, paper-based marketing in the form of catalogs and price lists is expensive and makes it difficult to keep customers up-to-date with the latest product availability and pricing.

Ultimately, all these factors impact buyers through higher prices or poor service. Buyers have to implement time-consuming processes to prevent purchases that exceed employee limits. As a result, the cost of processing requisitions and purchase orders often exceeds the value of the goods being purchased. Buying organizations also find it difficult to prevent employees from purchasing from non-preferred suppliers and thus do not get the advantage of negotiated prices. This adds to buyers' costs and reduces business for their preferred suppliers.

There is, therefore, an extremely large overhead factor associated with the procurement of products and services which, in a large organization, can cost the company thousands or even millions of dollars a year.

There is a need, therefore, for a simple automated procurement system that will reduce the amount of paper needed to be handled and enable the employees within an organization to acquire the goods and services that they require, consistent with their needs to perform their tasks. An automated system must be secure so that it is not abused by employees within the organization or parties outside of the organization.

There have been a number of obstacles in establishing an effective commerce system. Systems disclosed in previously issued patents have sought to address some of these obstacles. One problem is the "user-friendliness" of the systems, or the ease of use of the systems so that each person that needs to requisition a product or service can do so in an easy and efficient way. Another problem has been to develop a system that can be used with existing computer systems. This is an important consideration since many businesses have already made substantial investments in "legacy" systems, including main frames, mini computers, and micro computers. These systems frequently use different operating systems and different data formats. Another problem has been to develop user interface that is secure from abuse from within and from outside the buyer organization.

One example of an on-line system for processing business transactions is disclosed in U.S. Pat. No. 4,799,156 for an Interactive Market Management System. The system discloses a plurality of buyers and a plurality of sellers which can be linked to each other by means of an interactive market management system (IMMS) for interactive communications. Each of the participating entities which is a subscriber to the system must always operate through the IMMS, which serves as a focal point or hub through which all transactions must be funneled. The patent does not address the need or ability of individuals within an organization to be provided with different levels of authorization so that different users within the same organization or "buyer" can access different types and/or spend different amounts on goods and/or services.

In U.S. Pat. No. 5,557,518, a system is described for trusted agents for open electronic commerce. However, this patent involves the use of "money modules" to create a secure transaction environment for both the buyer and the seller of electronic merchandise and services. The primary objective of the patent is to provide a system which allows customers to buy electronic merchandise or services on demand without enrolling in an electronic community. According to this patent, a customer and supplier, trusted agent, establish a secure session. The customer trusted agent communicates with a first money-module and the supplier trusted agent communicates with the second money-module. The supplier trusted agent delivers the electronic merchandise. The first money module transmits electronic money to the second money module. Upon successful completion of the money payment, the first money module informs the customer trusted agent, and the second money module informs the supplier trusted agent. The supplier then logs the sale and the customer may use the purchased electronic merchandise. The patent appears to be restricted to the sale of electronic merchandise.

In U.S. Pat. No. 5,319,542, a system for ordering items using an electronic catalog is disclosed. However, the disclosure is primarily concerned with establishing a private catalog resident on a customer's computer system. The customer can electronically requisition a product based on the information provided in the catalog and route or requisition through the appropriate approval process within the enterprise. However, requisitions must then be processed through the customer's procurement system and transmitted electronically as purchased orders to the supplier. Therefore, aside from establishing private catalogs which may be used by the customer, the system disclosed in the patent does not eliminate many of the inefficiencies and expenses involved with requisitioning products and/or services by many employees in a large organization.

In U.S. Pat. No. 5,592,378, a computerized order entry system and method is disclosed which includes a plurality of servers, data entry devices, back-end systems and data bases. The computer order entry system is intended to permit placement of orders by capturing order information and storing the order information through the data capture mechanism. This is accomplished by a sequence of steps of multiple search categories. The patent does not address the ready accessibility and ease of use by many employees within an organization to requisition goods/services from a pre-arranged trading partner or multiple partners.

SUMMARY OF THE INVENTION

It is an object of the present invention to provide an electronic procurement system for and method of initiating and consummating sales transactions of goods and/or services by buyers and suppliers (as pre-established trading partners).

It is another object of the present invention to provide an electronic procurement system as aforementioned which is easy to implement and to use.

It is still another object of the present invention to provide an electronic procurement system and method, as suggested in the previous objects, which is particularly suitable with buying organizations having a large number of employees each of which has well-defined authorizations for the purchase of goods/services in order to control such purchases and prevent abuses from within the organization.

It is yet another object of the present invention to provide an electronic procurement system, as suggested in the previous objects, which enables each user within a purchasing organization to use an Intranet connection to access the organization's Intranet Server as a means for accessing the supplier's server via an Internet connection by using an Internet browser.

It is a further object of the present invention to provide a secure electronic real-time purchasing transactions between a buyer and supplier without third-party intervention.

It is still a further object of the present invention to provide an electronic procurement system, of the type under discussion, which permits any buyer and supplier organizations to establish an electronic commerce relationship with each other without regard to other establishments or enterprises, that may likewise establish electronic commerce relationships with the same or other buyer and supplier organizations.

It is yet a further object of the present invention to provide an electronic commerce procurement system which permits manual or optional automated payments by the buyer organization's bank to the supplier or supplier's bank after goods/services have been ordered and delivered to the buyer.

In order to achieve the above objects, as well as others which will become apparent hereinafter, an electronic commerce system for procuring goods/services by a plurality of users within an organization, according to the invention, comprises a plurality of terminals. A customer server is connectable to each of said terminals and includes log-on means for providing access to a user by means of one of said terminals only if the user can be properly authenticated by the customer server. A supplier system is used which includes a supplier catalog server for storing data representing a supplier catalog of goods/services that are available for purchase by an authorized user in the customer organization and a supplier processor server for processing orders received from the authorized user within the customer organization. The supplier catalog server and the supplier processor server may be combined into one server. Said supplier system is directly accessible by said customer server through an Internet connection. Security means is provided within said servers which limit transactions to entities that have pre-arranged relationships for displaying supplier catalog information to an authorized user within the customer organization for issuing a purchase order by the user