E-procurement, the buzzword of business

E-procurement, the buzzword of business

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E-procurement is a plural concept. It includes all the software solutions the company uses to buy and supply supplies online. Formerly used for so-called “eraser and pencil” shopping, e-procurement quickly rose through the ranks. Today, many companies use it to make their production purchases. Focus on this tool that experts consider as an alternative to effectively manage the supply chain.

What analysis can we make of the e-procurement concept?

The rise of e-commerce has completely changed the business market and customer relationships. We have witnessed the development of new partnerships between companies and the creation of new technological applications. These tools make supply management remarkably easier. ERP, SRM, EDI, SCM and e-procurement are some of these solutions.

E-procurement is a concept derived from “network economy” in French, collaborative or network economy. Thanks to e-procurement, we are witnessing a profound change in the behavior of sellers and buyers. The advantage of e-procurement or online shopping is the fluidity of exchanges and the ease that this process brings to the management of the purchasing function.

We now know that e-procurement streamlines and optimizes online sourcing methods. The objective pursued, through the implementation of such mechanisms, is to achieve a reduction in order processing times and costs. In terms of supply management, e-procurement officially contributes to value creation. This supply modality uses its online catalogs and those of its suppliers for its implementation.

Do not confuse e-procurement with e-sourcing or electronic data interchange (EDI). Electronic data interchange has been effective since the 1980s. This technique enables data exchange in a computerized and structured way. It involves the information systems of customers and their suppliers. Its very high management cost is the main disadvantage of EDI.

With regard to e-sourcing, its objective is to optimize upstream purchases by standardizing and improving the quality of research, product selection and price negotiation with suppliers. E-sourcing improves the quality of information sent to buyers.

What are the components of e-procurement?

E-procurement is made up of several components. The first one is the formalization of the purchasing processes in your company. This assumes the flattening of the processes after their analysis and simplification.

The definition of “workflow” is the second component of e-procurement. This anglicism designates the approval and validation circuit of an order. Implementing a “workflow” procedure allows the buyer to use limited rights for product selection. This step follows the issuing of an order validation request and its submission to the purchasing manager.

The third pillar of e-procurement is the integration into your company’s information systems and online shopping tool. One of the advantages of this functionality is the automatic insertion of data in the final order. There is no need to re-enter the list of ordered items. Should I remind you? This operation is a source of errors and a lot of time wasted.

The fourth and final pillar is the possibility offered to each employee to formalize their own purchase order. This involves facilitating access to the tool and the use of your suppliers’ private catalogs.

What benefits can we expect from e-procurement?

Among the many advantages of e-procurement are, in good place, the optimization of the production chain, the simplification of administrative management, the saving of time, the reduction of costs, the instant launch of tenders, the direct supply to the markets and the online catalogues.

The main benefit that the Internet offers the purchasing function is the efficient and less costly management of the entire supply chain. Considered too cumbersome and unproductive, traditional purchasing methods will soon be replaced by e-procurement. Regardless of the reasons for your choice in your company: search for information about suppliers and products, follow-up or purchase, the mission of e-procurement is part of the rationalization of the purchasing process.

Do not forget that plurality is the essential characteristic of the purchasing process. These include different phases ranging from choosing suppliers to ordering. Phone contact, verification, sign-ups, and confirmation are other important steps in this process. Maintaining contact between the buyer and the reception, management control and accounting departments is a requirement.

In addition, purchase procedures take forever. First, you need to start by researching suppliers. This survey should be followed by a comparison of offers and services. Since most buyers are sorely short of time to complete these tedious tasks, many choose to return to the home market. This is where e-procurement is revolutionizing purchasing practices.

Focused on e-commerce, e-procurement procedures offer the buyer great leeway. The latter can now overcome spatio-temporal constraints and contact any supplier located halfway around the world.

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