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e-Procurement at Cathay Pacific Airways: e-Business Valuation  
 
Product Ref: 02/141C Company: Cathay Pacific Airways Limited

Product Type: Case Industry: Transportation

Related Product(s): Teaching Note
Authors: Ali Farhoomand   Pauline Ng
At the end of 2001, Cathay Pacific's CXeBuy electronic procurement system was fully operational for its headquarters in Hong Kong. The 14-month implementation project aimed at applying Internet-based technology to build the most efficient purchasing process and capability in the industry. The strategy was to Web-enable the procurement of goods and services for five of the airline spend categories, namely: in-flight service, cargo, information technology, marketing and office supplies. While the project was far from complete, and as Cathay had just embarked on the next stage of rolling out CXeBuy to its outports, a member of the Project Steering Committee (PSC) queried the actual benefits realised so far as a result of e-procurement implementation. Robert Lamoureux, manager in charge of the e-procurement initiative, proposed to the PSC to formulate a methodology that user departments could apply at will to assess the impact of CXeBuy on their operations. However, some members of the Committee raised concerns that such a voluntary approach would serve only a limited purpose, and would fall short of providing department heads with an overview of the impact of CXeBuy on the overall corporate mission. As these issues began to filtrate through the Airline, defensive arguments were raised by other PSC members, who were unsure of the need for such a valuation exercise at this early stage. Something had to be done to reinstate the need for accountability and support the premise that any Cathay Pacific e-business initiative had to prove its value, not only from a soft benefits standpoint but also in terms of satisfying the payback and ROI deliverables presented and endorsed by the Executive Committee in the first place.
Functional Area : Management of Information Systems

Issues: Electronic Commerce, Purchasing, Valuation
Length: 20 pages Country: Hong Kong SAR

Pub. Year: 2002 Level of Difficulty: 2
         
This product type is available in the following language(s):      English
         
Related Information: N/A
 
This case is UGC funded.
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