Procurement can be defined as the process of acquisition of Goods or services from a vendor or supplier on request from the purchaser. This involves the vicious cycle of requisition & approval from the company / requester to the Vendor / Supplier respectively.
Hence Procurement follows a long cycle of requisitions and approvals for the final receipt of order !!!
Challenges with Conventional procurement
– Incomplete and inconsistent knowledge of the products available for order: In sufficient knowledge of the product results in inappropriate orders with insufficient details
– More people, time and effort in the process: With manual processes the challenge to live up to large orders results in time delay or unnecessary add On of resources
– No metrics for continuous improvement and management: The scope of process improvement gets constrained for un availability of appropriate Metrics
– Incorrect orders: Manual procurement processes do not allow for validation of the data and order, leading to erroneous procurement requests from the user
With the advent of web revolution organizational processes got aligned with web, so procurement was no exception !!!
Why E procurement !!!
E procurement changed organizational dimensions resulting in Process Automation to enable self service procurement, which prevents time lag in the procurement process. It enhances visibility to the end user by making the process more transparent. It ends the complexity in multi level approval and requisition processes. 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 costs or invite bids.
Transactions can be initiated and completed. Ongoing purchases may qualify customers for volume discounts or special offers. E Procurement software makes it possible to automate some buying and selling Processes saving a lot of time & resources. E Procurement has enabled the supply chain management to get elevate to the next level, providing real time information to the vendor as to the status of a customer's needs. The E Procurement value chain consists of Indent Management, eTendering, eAuctioning, Vendor Management, Catalog Management, and Contract Management.
E Procurement extends reach to the widest possible marketplace. Organizations have started harnessing the power of E Procurement. E Procurement does not just deal with sales and purchasing. With today's Internet capabilities, it has never been easier, or cheaper, for businesses to market and advertise their products. Instead of costly and time consuming mail shots, a single email can be sent to many customers at a fraction of the price. Even business conferences with staff based all over the world can take place electronically.
E Procurement system simplifies the requisitioning process through a very intuitive user interface. The shopping cart based user interface is a welcome change from the boring, time consuming, table based interfaces that e procurement systems have had for the longest time. Self service based procurement process allow end users to be able to order items from a centralized catalog and track the progress of their orders. This highly reduces the administrative overhead of management and maintenance of orders by the help desk.