Philip Connolly, GlaxoSmithKline's VP-IT communications, said the company will use QuickSource to run smaller auctions for less complex deals. "It will be used for where you don't need the full sort of consultancy deals that FreeMarkets provides," Connolly said. Whether his company will set up a private exchange is not determined, he said.
Notably, FreeMarkets ran auctions for the smaller of the two merger partners, SmithKline Beecham, for several years, sourcing $384 million in goods and services on its behalf. Connolly declined to provide Glaxo Wellcome's procurement budgets prior to the merger. But industry watchers said it is a good deal higher than SmithKline Beecham's.
With e-buying, however, experience is as important as volume—and Glaxo Wellcome, which has done scant Internet procurement, well understood this. "It was something that SmithKline Beecham was doing," Connolly said. "And when we started to look at e-business, SmithKline Beecham had definitely done more than Glaxo had."