eProcurement

What is eProcurement?

eProcurement is the use of software systems that help you with procurement activities, where the ‘e’ stands for electronic. Using technology to support and automate your procurement processes brings efficiencies to your business and streamlines what were once manual processes. You’ll be able to use eProcurement software systems at any stage of the procurement process, whether that’s at the start with sales or at the end when you come to invoicing.

Today, eProcurement has been emerging rapidly as markets become more dynamic and require companies to increase productivity and manage costs effectively. eProcurement has become a popular option for interfacing with suppliers too.

Types of eProcurement

eProcurement is made up of lots of electronic processes that help you to drive efficiencies and streamline many manual processes.

eProcurement is supported by other electronic activities which are:

• eInforming:
  The use of researching and distributing procurement information using the internet.
• eTendering:
  This involves improving the tendering process for the procurement of specialised goods of services using software systems.
• eAuctioning:
  This is the process or organising products for online competitive bidding. Auctions are held online, which makes it possible for more people to participate.
• ePurchasing:
  This is used for the procurement of services and products that are low in value but high in volume.
• eOrdering:
  This involves creating and approving procurement requisitions, all through software systems which help to streamline the supply chain performance.
• eInvoicing:
  This includes all the different electronic methods that you can use to invoice customers.
• eContract management:
  This is the management of payments, contract variations, performance and auditing which is all managed electronically.

What are the benefits of eProcurement systems?

eProcurement brings a large-scale cultural change in an organisation. It’s important for everyone within the organisation to feel prepared and understand the benefits eProcurement systems will bring. Here are just a few benefits of eProcurement systems that you may expect to achieve.

• Standardisation throughout the company
• Cost reduction due to better prices being offered
• Ability to centrally track high-volume and low-volume expenditure
• Helps to tackle corruption and increase integrity in public procurement processes as it provides every detail on the nature of expenditure and purchases
• eProcurement helps manufacturing companies to develop new products faster based on customer feedback or new research. This results in higher customer satisfaction, innovation and can boost profit.
• eProcurement helps organisations to broaden their horizons. Helping them get in touch with several suppliers, compare and get the best price available.
• Automated procurement can help decrease the time taken by the production cycle.

What are the disadvantages of eProcurement systems?

eProcurement systems are not suitable for every organisation. Implementing the systems brings about a huge cultural change and will need to involve other areas of your organisation. Look at some challenges that you may come across when implementing an eProcurement system.

• Whilst eProcurement encourages engagement with different suppliers, long-term relationships with one supplier brings an assurance of quality.
• There are multiple standards in eProcurement that can give rise to ambiguities and about the product or service.
• Implementing eProcurement brings about a radical change in an organisation, which means you may need to visit internal processes which can be time-consuming.