The Health Service Executive is in the advanced stage of a pilot programme of an online supplier management system that it hopes can deliver significant efficiencies in the way it deals with its thousands of suppliers.

Dublin-based Supplierforce.com is providing its software to the HSE as a hosted service for a pilot that began at the end of last year. The software is initially being used to cleanse and consolidate the information about thousands of suppliers that is held on numerous databases that would have been operated by the old health boards.

Using Supplierforce's integration with existing enterprise resource planning (ERP) systems such as those offered by SAP, suppliers can access a secure website and update their own details such as contacts for customer support, accounts and legal departments, VAT numbers, escalation paths and other information required for a smooth relationship.

This concept of "supplier self-administration" is just one element of how Supplierforce's software can benefit large organisations like the HSE, according to company founder and chief executive Declan Kearney.

The carrot held out to suppliers is that they can be paid more quickly and have a better view of what organisations like the HSE are seeking from them.

Unlike other attempts to apply web technologies to procurement and supply chain, Mr Kearney stresses that Supplierforce is about improving the management of suppliers rather than trying to source a better deal from a pool of suppliers. The company estimates that large organisations can save between 3 to 5 per cent of their annual procurement spend through better management.

The idea for the company grew out of Mr Kearney's experiences working as a global account manager for European telcos in Europe.

"I was using customer relationship management (CRM) tools like Siebel and Goldmine to try and track customer information but I still spent an awful lot of time on the phone trying to resolve issues," he explains. "I felt things could have been resolved much quicker if both the customer and ourselves had the same data."

He discovered there was no software on the market that fitted the bill and set about creating it himself. Receiving funding from Dublin financier Derek Quinlan in early 2004, Mr Kearney outsourced development of the system to a local team of developers. The system was ready to show to customers in late 2005 and the first company to come on board was Jurys Doyle Hotel

"They used it to automate the process of auditing suppliers and initially focused on three key categories for them: food, beverage and contractors," says Mr Kearney. "They proved the concept works."

The next big customer win was mobile operator O2 - although it had a tool for sourcing products and services, it had nothing in place to manage data about suppliers. Supplierforce is now used as the standard interface for adding a new supplier to O2's SAP system and it has reduced the cost of adding a new supplier by 71 per cent, according to Mr Kearney.

Although the company's customers to date have been based in Ireland and the UK, Supplierforce clearly has international ambitions.

Under the model of software as a service, customers purchase a license to access the software securely on a website customised to their processes, which is priced according to the number of suppliers managed and internal users accessing the system.