John Shearn joins PFAR Consulting www.pfa-research.com John Shearn, previously head of sales and marketing with e-procurement company Setfair, has joined PFA Research as head of its consulting division. PFAR Consulting is currently working for a range of clients including telecomms companies. One of the services PFAR Consulting offers is procurement systems optimisation: looking at the purchasing processes and working out how to improve them. It is a division of PFA Research, which is owned by Gil Patrick, previously Setfair's chairman. Mr Shearn believes there is a lot software can do to improve the procurement process. He differentiates between "purchasing", which is buying something when you know exactly what you want, and "procurement," which involves working out what you want, finding the right product, finding the suppliers, and working out how to negotiate a price, a much more complex process. "What most of what the trading platforms are doing is actually purchasing," he says. "But procurement is all about sourcing and strategic partnering. How do you decide: do I tender or do I negotiate?" "There is widespread demand for procurement process improvement," he says. "Sourcing tools are currently very weak. The whole area of sourcing is the next place to go to with business support software." "At the end of the day procurement is about intuition, the gut feel," he says. "But technology can supplement the gut feel. It can help people avoid making bad decisions and make them feel more comfortable and in control." Following his experience with Setfair, Mr Shearn is cynical about the business prospects for third party online market places, sitting between buyer and seller. He thinks it is more likely that maritime e-commerce will developed around buyer specific platforms. "Setfair was seeking to build an independent, third party managed, neutral marketplace," Mr Shearn says. "I argue now that this model is fundamentally flawed. People distrust it, and it's too slow. I don't believe there is any point whatsoever in trying to build a 3rd party platform for the maritime industry." "What we see now is that the likely way forward will be for big buyers who want to deal over the internet to build these platforms themselves," he says. "If you're a shipyard which has 30,000 suppliers, you can build your own platform. You can do it in house." SUBHEAD After Setfair Setfair was originally established by ship-shore communications company Inmarsat, which sank £30m[GP1] into the venture in June 2000 and subsequently pulled the plug and wrote off its investment, rumoured to be on the advice of bankers Morgan Stanley, who did not think having a dot com venture would help Inmarsat in its proposed flotation. Mr Shearn comments that he is pleased to see the life of Setfair continue, even though the business doesn't, and the maritime industry can certainly benefit from the experience it developed. "Someone can say, I can learn all this stuff without spending all the money Setfair did," he says. Setfair's main assets were its rights to use certain software products, including Oracle and Tibco, which many regard as "best practice" tools in the ecommerce/integration areas. These rights were subsequently purchased by a group of investors, who have used it to solve problems for individual clients. "Setfair was great," he says. "We created lots of noise. There was so much good stuff. But we didn't quite get the timing right and of course it took too much money. I'm not denying that it should have been closed down."