E-procurement
E-procurement (electronic procurement, sometimes also known as supplier exchange) 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 systems.[1]
The e-procurement value chain consists of indent management, e-Informing, e-Tendering, e-Auctioning, vendor management, catalogue management, purchase order integration, Order Status, Ship Notice, e-invoicing, e-payment, and contract management. Indent management is the workflow involved in the preparation of tenders. This part of the value chain is optional, with individual procuring departments defining their indenting process. In works procurement, administrative approval and technical sanction are obtained in electronic format. In goods procurement, indent generation activity is done online. The end result of the stage is taken as inputs for issuing the NIT.[2]
Elements of e-procurement include request for information, request for proposal, request for quotation, RFx (the previous three together), and eRFx (software for managing RFx projects).[3]
Alongside the increased use of e-procurement, needs for standardization arise. Currently, there is one globally developed open extensible markup language based standard framework built on a rich heritage of electronic business experience. It consists of five layers - messaging, registry and repository, collaboration protocol, core components and business processes.[4]
Vendors[edit]
This field is populated by two types of vendors: big enterprise resource planning (ERP) providers which offer e-procurement as one of their services, and the more affordable services focused specifically on e-procurement.
Benefits and Disadvantages[edit]
Benefits[edit]
Implementing an e-procurement system benefits all levels of an organization. E-procurement systems offer improved spend visibility and control and help finance officers match purchases with purchase orders, receipts and job tickets.[26] An e-procurement system also manages tenders through a web site. An example is the 'System for Acquisition Management (SAM)' which on July 30, 2013, combined information from the former Central Contractor Registration and Online Representations and Certifications Application (ORCA),[27] in the United States.[28]
In the case of government procurement, the benefits might be efficiency, transparency, equity, fairness and encouragement of local business. Because e-procurement increases competition, lowers transaction costs, and has potential to minimize time and errors in the bidding process, efficiency is achieved. Because of easier accessibility and openness of the internet, more people can attain earlier pieces of information, which increases transparency. Neutrality to location and time ensures equity and fairness.[29]