E-procurement (electronic procurement) is the B2B or B2C or B2G procurement of goods and services through electronic methods, such as Internet as well as other information and networking systems like EDI or ERP. 1)
Typically, E-procurement web sites allow qualified and registered users to look for buyers or sellers of goods and services. Depending on the approach, buyers or sellers may specify prices or invite bids. Transactions can be initiated and completed. Ongoing purchases may qualify customers for volume discounts or special offers. E-procurement software may make it possible to automate some buying and selling. Companies participating expect to be able to control parts inventories more effectively, reduce purchasing agent overhead, and improve manufacturing cycles. E-procurement is expected to be integrated with the trend toward computerized supply chain management.
Some firms have discovered that many of their transactions still take place on paper, and they have run into problems ranging from content management to supplier participation in their systems. Most companies who desire to make the switch fall into two camps. The first are the slow step-by-step adopters. They implement one piece of their system at a time and slowly bring trading partners on board. The others follow the total replacement model. They build a totally parallel system, test it, then switch over to it when it works. There is usually some pain involved and some mistakes are discovered, but by and large these are absorbed and the business continues. 12)
<note tip>“Do not bite off more than you can chew.” 13)</note>
Adopting a complex E-procurement system should only be considered if you have the time and resources to implement this. The possible advantages are described in the text above. If not, stick to an incremental approach.14) You can´t expect an immediate return on investment. A short-tem gain may be noticeable, but it may be eaten up by the cost of staff training and equipment purchases. A year or two down the road and a larger ROI should be evident.