File Name: e procurement advantages and disadvantages .zip
E tendering system has turned out to be extremely successful after the quick pace of innovation in technology.
- Benefits of an E-Procurement Process
- The Advantages And Disadvantages Of E-Procurement
- What is eSourcing?
In its broadest sense, e-procurement involves electronic data transfers to support operational, tactical and strategic procurement. E-procurement has therefore been around for much longer than the term itself which first came into usage after the establishment of the internet in the s. From the s until the mid s, e-procurement primarily took the form of electronic data interchange EDI. Nowadays, e-procurement is often supported by internet technologies and is becoming more prevalent. The historic context is demonstrated in the chart below:.
Benefits of an E-Procurement Process
One of the key areas of debate currently in the procurement sector is the how e-commence can be harnessed to improve the efficiency of organisations and thus can be used to support the drive for organisation profitability. Electronic procurement, commonly referred to as e-procurement, defines the automation of procurement and supply chain processes using internet based applications and technology. This expands the idea of enterprise resource planning ERP systems, allowing the automation of internal business processes, thus providing a platform that supports automation at a global level. It allows procurement professionals across the world to communicate information simply and efficiently, streamlining the global procurement process; reducing time and costs without compromising on standards and quality. There are many benefits to be found from using e-procurement within an organisation, and the following are just some of the key points:.
The Advantages And Disadvantages Of E-Procurement
Many purchasing managers worry that e-procurement is too complicated and opens their organization up to privacy concerns and errors. But there are some very important benefits to e-procurement that you may not have considered. E-procurement saves you money by preventing duplicate spending, leveraging volume buying, and saving you costs associated with paper-based systems for example, the cost of stamps to mail your paperwork. Electronically conducting your procurement makes it easier to write and analyze reports on your procurement systems, meaning you can ensure that your procurement procedures conform to your policies. Having your records stored electronically makes it easier to submit reusable tenders.
E-procurement advantages are becoming more evident as the wider understanding of its many uses become apparent. The main reason companies have embraced e-procurement is to increase productivity, provide visibility into day-to-day transactions and make it easier for users to get the supplies that they need. It has not been an easy road for e-procurement as implementation has its challenges and it has taken time for business managers and procurement departments to fully accept it. The advantages of e-procurement are slowly being understood:. Costs can be reduced by leveraging volume, having structured supplier relationships and by using system improvements to reduce external spend while improving quality and supplier performance.
What is eSourcing?
Like all transformative technologies, E-Procurement has its share of associated pros and cons. Building a thorough understanding of the benefits offered by E-Procurement solutions, as well as the potential disadvantages of E-Procurement improperly applied, can help you identify and implement the software tools best suited to meeting your goals for cost savings and continuous improvement in all your business processes. Also known as e-procurement , E-Procurement software gives organizations visibility and control over all their procurement processes, ranging from the procure-to-pay P2P cycle to supply chain management to strategic and financial planning.
Considering the implementation of new software tools or systems is a process that should always include an acknowledgement of the challenges and disadvantages associated with those tools, and this concept applies to e-procurement systems as well. All it takes is a quick Google search to be surrounded by forests of praise, cost-savings, and efficiency enhancing features. But when it comes to addressing the real challenges and potential disadvantages of e-procurement systems, reading about the difficulties that procurement professionals have encountered in the past is the best way to find the right questions to ask before buying-in.