The new age of information technology has revolutionized the global business world. It has brought in a radical change in the approaches, methodologies, and the strategies of business operations across the globe. One important introduction amidst the innovative changes taken place in the business arena is the E-Procurement.
E procurement is an inventive and beneficial web based purchasing system that caters to all business transactions and interactions through internet and other networking devices. The system organizes, manages, and streamlines all purchasing transactions between buyers and suppliers, thereby providing transparency to the cost management system.
Advantages of eProcurement
The advantages of eprocurement can be summed up to the following:
- The system leads to increased efficiency and productivity in the business processes. Eprocurement not only provides intelligent business techniques, it also gives rise to new aspects of the business which in turn focus on strategic sourcing.
- Eprocurment leads to efficient tracking of transactions through a centralized data repository. This in turn gives rise to an all round improvement of the working system which would no longer revolve around petty manual jobs. The system provides a complete report on the items ordered, items purchased, order processes, requisitions, and payments made.
- It leads to improved compliance to business policy and transaction guidelines. The system introduces a standardized workflow with a transparent approval processes to make business process more efficient and also enhance buyer-supplier relationship.
- E-procurment drastically reduces the operation time required for buying or selling as the buyers do not have to stand in queues and pay the money manually. This leads to an overall development of the system.
Buyer’s Benefits of e-Procurement
The system has proved to be a blessing to both buyers and sellers. It has triggered the way businesses run their operations in an efficient and transparent manner. For buyers, efficient purchasing process, improved cost management, and enhanced customer relationship becomes an added advantage. In addition, some of the other benefits of an e-procurement system to buyers include:
- Availability of pertinent information
- Well organized centralized data repository
- Standardized transaction processes
- Improved contract compliance
- Improved cash flow
- Lower cost of administration
- Less inventory
- Reduced material and process costs
- Easier access to the seller’s product list
- Faster ordering
- Lower transaction costs
- Less paper work
- Increased efficiency
- Centralized purchasing offices
- Provides integrated data warehouse
- Create better business opportunities
Seller’s Benefits of e-Procurement
E-procurement also brings host of advantages to sellers as they can now have a better and wider access to the global market place. In addition, the other benefits of e-procurement to a seller include:
- Increased sales volume
- Reduced operating costs
- More collaboration between the buyer and seller
- Better communication with customers
- Improved performance
- Streamline the procure-to pay process
- Increased supplier visibility
- Improved product quality
- Handling low value transactions
- Improved compliance to policy