|
The advent of the internet has offered the options of e-procurement, which has simplified the procurement process for most of the businesses. E-procurement basically involves the transfer of electronic data to support strategic, tactical and operational procurement. From 1960s to the mid of 1990s, the primary form of e-procurement was Electronic Data Interchange (EDI). The businesses dealing with procurement need to have a sound understanding of the e-procurement tools and concepts to improve the effectiveness and efficiency of their procurement strategies. This article discusses some of the tools used in e-procurement. The officers and managers responsible for carrying out procurement strategies should know the following: • They should have an idea about the different applications of e-procurement. • They should be capable to identify the processes of procurement, which have the effective support of e-procurement. • They should be aware of e-procurement’s benefits. • They should also beware of the risks of e-procurement. Tools and applications of e-procurement: 1. Electronic systems supporting traditional procurement : These electronic systems include personal computers, mainframes, Enterprise Resource Planning (ERP) and Electronic Data Interchange (EDI). 2. Electronic Data Interchange (EDI): This is an application which allows the interchange of electronic messages between the computer programs of separate organizations. Some of the features of EDI are: • Massages are exchanged in the form of groups, called batches. • It allows you to send, store and transmit messages between computers, without the need to key or retype data. • Both the sender and the receiver need to implement EDI. Hence, it has relatively higher costs. • It is usually used where the messages are related to matters like invoices, transport information, confirmations and orders. 3. ERP Systems: These systems are basically information systems related to management. They allow the automation and integration of business practices related to a company’s operation. ERP systems are used to handle a company’s accounting, invoicing, shipping, inventory, distribution, logistics and manufacturing. These systems help you to control business activities such as human resources management, inventory management, procurement, production, billing, delivery and sales. 4. Electronic Mail: Email is a web application that allows the exchange of electronic messages between people. 5. Extensible Markup Language: This allows the documents to interchange easily on World Wide Web. Traditional procurement has been replaced by various internet platforms and tools. Some of them are discussed below: • E-sourcing: E-sourcing provides support to the phase of specification. It allows you to pre-qualify suppliers, helping you to identify the suppliers who can be included in selection phase. • E-tendering: It provides support to the selection phase, serving as a platform of communication between the suppliers and procuring organization. • E-auctioning: It supports the stage of contract. It allows you to close a deal with supplier, when agreement is reached on a price. They have a downward or upward price mechanism to operate on. • Web-based ERP and E-ordering: It is the procedure of approving and creating procurement requisitions, placement of purchase orders and receiving the ordered services and goods, by the usage of internet based software systems. Conclusion: E-procurement simplifies your procurement strategies and brings better results. You can use the various tools for e-procurement to increase the efficiency of your procurement strategies. Justin Turner writes articles on Cost Reduction Consultant. For further queries and information visit the website www.routeorg.co.uk
Related Articles -
Procurement Consultants, Procurement Companies, Expense Reduction Analysts,
| 
