Implementing a Successful E-Procurement Strategy
This paper will explore how and what a company should consider when interested in implementing an e-procurement process to their organization. With so many variables to consider and products out there it can be overwhelming and one may lose the goals and purpose the organization originally started with. If the right process is not in place, an organization may come out worse before the implement. If implemented correctly, the e-procurement process can increase efficiency, productivity and add additional cost savings opportunities. There are also benefits in supply chain with greater forecasting and providing a competitive edge against their competitors.
The primary objective for a business is to make a profit. Since every company buys goods and services and there are large amounts of money flowing through the purchasing process, it should be one of the most highly tuned areas. Procurement usually represents one of the largest expense items in an organization’s cost structure (Attaran & Attaran, 2002; Lennon, 2002). Originally the procurement process involved a lot of slow and manual processes for each transaction. With continual improvements coming from the internet, provides numerous opportunities to make procurement for goods and services more visible and efficient for corporations. Allowing e-business into an organizations world has drastically altered the way they interact with their vendors and suppliers (Phillips, 2003).
E-procurement or electronic procurement, is the business-to-business or business-to-consumer or business-to-government purchase and sale of supplies, work and services through the Internet as well as other information and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning enable new types of collaborative alliances between partners (Wikipedia.com). There are seven main types of e-procurement which are stated below. Making sure the organization chooses the right one for their organizations goals and needs is extremely important. * Web-based ERP: Creating and approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology (Wikipedia.com). * e-MRO (Maintenance, Repair and Overhaul): This is the same as web-based ERP except that the goods and services ordered are non-product related MRO supplies(Wikipedia.com). * e-sourcing: Identifying new suppliers for a specific category of purchasing requirements using Internet technology (Wikipedia.com). * e-tendering: Sending requests for information and prices to suppliers and receiving the responses of suppliers using Internet technology (Wikipedia.com). * e-reverse auctioning: Using Internet technology to buy goods and services from a number of known or unknown suppliers(Wikipedia.com). * e-informing: Gathering and distributing purchasing information both from and to internal and external parties using Internet technology (Wikipedia.com). * e-marketsites: Expands on Web-based ERP to open up value chains(Wikipedia.com).
The amount of information available on product and service offerings that are designed to help an organization in its technology choices are endless. How do organizations determine which is the right strategy for their organization? How should the organization implement that strategy? Over the past decade, e-procurement has become a major factor in supply management and has changed the ways business purchase goods and services (Flynn & Yuva, 2000).
Before 1999, organizations that were on the cutting edge of e-commerce implementations were focused primarily on establishing point-to-point-ordering relationships with key suppliers (Flynn & Yuva, 2000). These transactions were enabled by organization specific catalogs often presented via electronic data interchange or posted inside an organization's firewall on its...
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