Procurement is the process wherein companies get goods or services from third party suppliers that can be used directly or indirectly for manufacturing products. Since the success of the Internet, more services are going from manual to electronic. Fortunately, procurement services cannot escape this trend. Hence, electronic procurement or e-procurement was introduced.
What is E-procurement?
E-procurement is a process where buyers and sellers connect electronically via the Internet. It allows buyers to browse the available items through the online catalogue, add items into their shopping cart and submit their orders electronically. Once the order is completed via an electronic workflow, purchase orders will be transmitted and relayed to the corresponding supplier.
There are two methods under this platform:
- Electronic data interchange – this is the electronic exchange of business information between organizations in a standardized format. This includes purchase orders, invoices, or inventory.
- Online marketplace – this is where buyers and sellers meet in an online environment. An online marketplace is a venue where various services are offered and simplify the process of procurement.
What are the benefits of this Type of Platform?
Today, different companies have realized the importance of maintaining a market share online. Most companies are taking advantage of e-procurement because of the following benefits:
- It reduces overall costs. E-procurement eliminates paperwork and errors while improving the quality and supplier performance.
- It improves buyer-seller relationships. It is easier to transact because placement of orders are more accurate. As a result, the corporate-to-corporate or buyer-seller relationships are improved due to fewer transaction errors.
- It aids in operational activities. It improves financial controls, easier to match orders, improves auditing and easier to track and verify order. It also reduces the cost associated with inventory and lessens the delivery time since companies no longer have to wait for the documents to be mailed.
- Shopping for goods is more convenient.In just a few clicks, customers can easily place their orders from a catalogue of approved items and submit it in an online requisition and ordering system. They no longer have to go to third-party establishments, thus saving them time and money.
- It is easier to track the orders made. Through e-procurement, companies can easily see a full report on the requisitions, items purchased, orders processed and even the payments made. There is a certain level of efficiency and accuracy which makes shoppers more confident about their preferred supplier.
- The level of authorization is correctly applied. When customers select a product or service from preferred suppliers, e-procurement’s standardized process and workflows assures that the transactions are placed accordingly.
Is it Worth Trying?
The answer is yes. Although telephone, fax or mail cannot be rendered useless, ordering online is the easiest and most convenient way for businesses to shop. The advantages of using this platform is undeniable. After all, there is no simpler way to shop than by doing everything in a just a single click. Regardless of the company’s e-procurement method having an organization which offers IT support services to assist your business is essential.
The key to the success of e-procurement is an adequate and fully-integrated approach. Companies must properly invest on e-procurement technology in order to boost efficiency and promote a better relationship with customers.