The advantages and disadvantages of the various procurement procedures student paper 310520 course. Hi, eprocurement can yield various benefits if leveraged effectively and in support of a good process. This is made possible by the central organization of data and presence of time stamps. Eprocurement has become very effective following the advent of modern technology. Embracing the future of procurement takes more than a purchase order and a quick web search. One of the primary risks is missing opportunities to implement strategies that improve procurement management without the need for investment in e procurement. Eprocurement is the answer as it can streamline purchasing and also reduce the risk of exceptions in your buying process. One of the key areas of debate currently in the procurement sector is the how ecommence can be harnessed to improve the efficiency of organisations and thus can be used. The sourcing cycle is the time it takes to find the supplies you really need and at the right price. It connects businesses directly to suppliers making procurement one of the easiest things to do. However, too many governments remain strapped to procurement systems that stovepipe the process and rely on manual and other inefficient processes.
E procurement leads to better control of the organization as the decisions are easily made. It does not apply to the relationship and interactions between. The role of procurement and the emerging use of large information systems to conduct e procurement is analysed and presented with the results of a survey of 38 major australian organisations. A firm may opt to deal with a few preferred suppliers to avail the required raw materials, components and parts that are transformed into usable products. In eprocurement, the determined payment is managed and. Nov 02, 2015 e procurement has become very effective following the advent of modern technology. The cipsa steering group set about the task with relish. Cgi advantage procurement romoting procurement efficiency, accountability and transparency is a top priority for state and local governments. Eprocurement in the context of the strategy is the ongoing and future business relationship between the council, its suppliers and contractors. Eprocurement adoption is an area of both threat and opportunity in terms of business productivity and competitiveness even if the benefits of adoption and the potential strategic implications of e. This paper presents the results of a literature survey developed to support a proposed model of the critical success factors csfs likely to impact the success of e procurement initiatives in the. E procurement systems are widely discussed in the ebusiness literature in which it is claimed that businesses generally experience three types of benefits e. Eprocurement advantages, disadvantages and lessons learned presented by craig rader, cppb, cppo purchasing agent county of sacramento cappo webinar.
There are numerous advantages to e procurement systems and they have made multiple vend. E procurement is evolving as one of the shining lights in the evolving e business story and this paper will look at a research survey of australian organisations to determine what is driving and hindering e procurement. As the electronic handling of tasks supports and simplifies the purchasing process, transaction speed is increased. The role of eprocurement in purchasing management 57 5. Eprocurement systems have made great strides in automating and streamlining the procurement process and have become increasingly popular in corporate america. E procurement applications can support multiple languages and currencies, as well as international financing, taxation, and shipping regulations. Eprocurement can simplify purchasing, save money, and improve the entire supply line. Its configurable features include solicitation management. E procurement advantages are becoming more evident as the wider understanding of its many uses become apparent. Eprocurement systems are widely discussed in the ebusiness literature in which it is claimed that businesses generally experience three types of benefits e. Every business strives to improve its performance, to be ever more.
At a cost of 15 billion, the train company purchased 2,000 new trains too wide for most train platforms. The effect of e procurement practices on effective procurement in public hospitals. Nyanamba, steve ondieki 1 lecturer kisii university p. There are several challenges in implementation a planned approach can lead to successful implementation ppp models are ideal for eprocurement projects. Originalityvalue much research on eprocurement has been conducted in the public sector of european and asian countries and this paper contributes to the small but growing number of studies of eprocurement in the context of the private sector in africa by studying the impact of eprocurement on strategic sourcing in cbz.
Eprocurement has proven itself as one of the more effective and efficient tools for bringing good governance to the procurement process in many member states, and e procurement initiatives have. A set of detailed resources including a mechanism for interested parties to create template terms of reference for launching their national e procurement. Design and build is a way to fast track construction and the contractor often should dictate a fixed cost or a guaranteed maximum price that offers certainty to the client. Eprocurement electronic procurement, sometimes also known as supplier exchange is the businesstobusiness or businesstoconsumer or businesstogovernment purchase and sale of supplies, work. Online learning material for interested parties to familiarize themselves with e procurement and the benefits of e gp e procurement toolkit. The ability to select the most appropriate supplier is essential for the success of any manufacturing entity.
The role of procurement and the emerging use of large information systems to conduct eprocurement is analysed and presented with the results of a survey of 38 major australian organisations. The corollary of this approach is that the eprocurement project should not have to shoulder the burden of the cost ofan erp system with which it will almost certainly coexist. The main reason companies have embraced eprocurement is to increase productivity, provide visibility into daytoday transactions and make it easier for users to get the supplies that they need. Pdf benefits of eprocurement systems implementation. Save time finding new suppliers by browsing the thousands registered in the sourcedogg supplier directory and attracting global suppliers with a published e request. There are many benefits to be found from using eprocurement within an organisation, and the following are just some of the key points. Some initial work from some members of the team and their support staff was followed by some full and frank discussions and a small e mail storm amongst members of the team. Limited integration of the procurement process into the operational information systems of the customer. A case of berkeley electrical ltd by jenifa callist a research paper submitted in partial fulfillment of the. There may be a high number of fields which can be confusing and could reduce the platforms reporting efficiency. The key challenges to delivering benefits from eprocurement are. Eprocurement puts a single buyer online with many suppliers, thus lessening the leg work traditionally associated with the buyer narrowing his or her field of suppliers. Eprocurement definition is the term used to describe the use of electronic methods, typically over the internet to conduct transactions between awarding authorities and suppliers. Greatly shorten the sourcing cycle with reusable e requests and other features.
This article will highlight the main advantages and disadvantages of utilizing it for your organizations acquisition. It executes on the negotiated contracts created by sourcing, which typically include pricing agreed upon for the goods, perhaps rebates once a quantity is reached, and other stipulations. The effect of ebusiness and in particular e procurement on internal customer service is being addressed in this study because e business and internal customer service are all important issues in todays globalisedworld which is characterised by stiff competition among organisations. The e procurement process eliminates unnecessary activities, allowing you to focus on more. The impact of eprocurement on strategic sourcing a case. European dynamics eprocurement etools project 2 11 problem significant inefficiencies are observed worldwide in several egp implementation initiatives, such as. It covers the complete tendering process from reoi via itbrfp to. The advantages of design and build tend to counter the disadvantages of traditional contracting procurement methods.
Using virtual e procurement portals, buyers have access to suppliers around the globe, which translates into a wider selection of goods and services. Simply put, etendering is where the procurement process is conducted online. The pros and cons of implementing eprocurement supply. It is relatively simple but used on a large scale requires a substantial investment in it equipment. The adoption of electronic procurement in turkey horizon. While it can be convenient, it also has several disadvantages. Precise definitions of eprocurement positive effects impacts will be given in the present chapter, starting from those defined by davenport and andersen and applying them to the case of eprocurement. Mistakes in purchasing can be both embarrassing and costly, such as the recent mistake by french train operator sncf. E procurement puts a single buyer online with many suppliers, thus lessening the leg work traditionally associated with the buyer narrowing his or her field of suppliers.
At a cost of 15 billion, the train company purchased 2,000 new trains too wide for. The implementation of e procurement tools carries certain risks. It is usually used by companies to receive services and goods at a less costly and. The effect of ebusiness and in particular e procurement on internal customer service is being addressed in this study because e business and internal customer service are all important issues in todays. The main reason companies have embraced e procurement is to increase productivity, provide visibility into daytoday transactions and make it easier for users to get the supplies that they need. Its easy enough to find the advantages and benefits of using an eprocurement system. The eprocurement process eliminates unnecessary activities, allowing you to focus on more. Eprocurement advantages are becoming more evident as the wider understanding of its many uses become apparent. Some initial work from some members of the team and their support staff. A case of kisii level 5 hospital matunga, denish ateto school of human resource development jomo kenyatta univ. Lessons learned rfp for eprocurement system research, research and research know the industry terms for services you are seeking be clear and try to read from a vendor. However, the danger is you can get carried away by the multiple customization options. The benefits of eprocurement oxford college of procurement.
A case of berkeley electrical ltd by jenifa callist a research paper submitted in partial fulfillment of the requirements for the award of masters degree of procurement and supplies chain management at mzumbe university certification20. Mar 12, 2015 e procurement has become very effective following the advent of modern technology. Eprocurement software tools offer features for detailed data analytics and classification. There is the e procurement software which was designed to satisfy that and it is a good choice to go for.
E procurement therefore improves productivity as procurement workers can concentrate on doing other important duties such as marketing. Applying any technology to a bad process can yield devastating consequences. Greatly shorten the sourcing cycle with reusable erequests and other features. It executes on the negotiated contracts created by sourcing, which typically include pricing agreed upon. Maximising on the benefits of e procurement is conditional on implementing good procurement practice. Using the e procurement platform, buyers have access to essentially an unlimited list of suppliers, which equates into a wider selection of goods and services. Despite its many advantages though, eprocurement can result in constraints and limited options for buyers if not approached correctly. 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. This is because many of the benefits ascribed to e procurement may be achieved simply by improving procurement practice. Define the terms purchasing and procurement management. Under regulation 22 of the public contracts regulations 2015, it is a legal requirement for public bodies to use electronic means.
The benefits and challenges of eprocurement implementation core. A model of e procurement drivers and barriers is presented with an analysis of the views of 38 organisations. On the contrary, the cause for most of the challenges faced by an e tendering system arises from the vendor and not the enterprise but rather affects the whole procurement process. Following esourcing, eprocurement is the actual purchase of the goods and services from suppliers.
Another advantage is you can centralize purchasing. Etendering supports the selection stage and acts as a communication platform between the procuring organization and suppliers. The concept of dealing with the few chosen suppliers in a manufacturing setting is referred to as direct procurement. Originalityvalue much research on eprocurement has been conducted in the public sector of european and asian countries and this paper contributes to the small but growing number of studies of e. State aid and public procurement in the european union coordinators. The effect of eprocurement practices on effective procurement in public hospitals. Eprocurement is evolving as one of the shining lights in the evolving ebusiness story and this paper will look at a research survey of australian organisations to determine what is driving and hindering e.
Electronic procurement, also called eprocurement, refers to a purchasing system that is internet based and automated. Critical factors that influence eprocurement implementation success 75 eprocurement report ibm, 2003 has identified the three areas where eprocurement implementation. Critical factors that influence e procurement implementation success in the public sector kishor vaidya, a. The advantages and disadvantages of the various procurement. Also, because of e enabled relationships with suppliers, procurement cycle times speed up. Online procurement helps you to be flexible in what you wish to include as well as provide access restrictions in an agile manner.
Authorities will need to invest time and money to both identify their opportunity from eprocurement and to deliver the expected benefits. The benefits of eprocurement over manual purchasing are many and multifaceted. Cgi advantage procurement solution transforms the endtoend purchasing process for procurement professionals, vendors and requestors. A firm may opt to deal with a few preferred suppliers to avail the required raw materials. Aug 26, 2016 every business strives to improve its performance, to be ever more efficient, which is why over the last decade, many have turned to electronicprocurement or eprocurement to analyse spend, stamp out inefficiencies and enjoy the economies of scale. The corollary of this approach is that the eprocurement project should not have to shoulder the burden of the cost ofan erp system with which it will almost certainly coexist via interfaces, but which is not required to practice effective eprocurement. Advantages and perceived disadvantages of eprocurement. E procurement has proven itself as one of the more effective and efficient tools for bringing good governance to the procurement process in many member states, and e procurement initiatives have received significant support from the donor community. E procurement electronic procurement, sometimes also known as supplier exchange is the businesstobusiness or businesstoconsumer or businesstogovernment 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. Because the vendor is obtaining more information about the customer than in case of normal supply chain management structure, major. One of theresearch suggest that ebusiness activities. Nov 11, 2016 e procurement systems have made great strides in automating and streamlining the procurement process and have become increasingly popular in corporate america. Advantages and disadvantages of etendering tendering is the specific procedure. The pros and cons of implementing eprocurement posted by simon creasey.