From its first use at IBM in the year 2000, the practice of e-procurement (also known by the monikers online-procurement or e-purchasing) has risen exponentially within e-commerce B2B marketplaces all over the world and expended across companies.
E-procurement stands for “Electronic Procurement” and entails the process of acquirement of goods and services between businesses through digital platforms. Companies today must face continually rising costs related to both the purchase and sale of services, supplies, products or even personnel. Handling these matters digitally can bring huge benefits both in terms of staff productivity and more importantly, saving in purchasing expenses all the while simplifying and rendering B2B transactions more secure.
E-PROCUREMENT SUBDIVISIONS FOR A BETTER UNDERSTANDING
Newer models and platforms of e-procurement could resolve all source-to-pay related procedures. We can subdivide the two key processes that make up e-procurement in two distinct subdivisions:
1. E-Sourcing: Comprises all pursuits relating to the research of new suppliers based on their qualifications and certifications as well as the actual negotiation phase.
2. E-Catalogue or E-Cataloguing: Refers to the recursive purchasing process of a product or service which has already been clearly defined by a sales bill or contract.
It has to be reiterated that all systems and platforms relating to e-procurement adhere to a complex set of procedures and standards that encompass e-commerce software utilized in B2B (business to business, B2C (business to consumer) or B2G (business to government) commercial endeavors. As said before, e-procurement platforms are designed to support source-to-pay (S2P) which can be in turn divided into S2C (source to contract) and P2P (procure to pay).
S2C concerns strategy and decision-making monitoring, analysis of purchases, tracking and handling of negotiations and risk assessment. P2P is more focused on practical aspects of transnational purchases delving into the selection of the product or service, placement of orders, shipping and logistics, invoice receipts and finally payment.
All standardized e-procurement platforms are based on interchange of data such as the Electronic Data Interchange (EDI) or Extensible Markup Language (XML) which interface with more evolved management software: ERP (Enterprise Resource Planning).
With all that said here are some ways that demonstrate how e-procurement reduces costs, reduces time constraints and protects private information relating to purchases. The benefits of e-procurement as a comprehensive digital solution can be expressed in 4 key areas.
BENEFITS OF E-PROCUREMENT FOR YOUR BUSINESS
1. Information on transactions can be handled in house or in the cloud therefore accessible through multiple channels via the internet.
2. All activities relating to purchases and sales undertaken by both the buyer and supplier can be verified and tracked, guarantying total transparency on both ends.
3. Availability of all data is made possible by the standardized procedures of data recovery and maintenance which in turn guarantees improved business continuity.
4. Overall security, transparency, and traceability are guaranteed by third parties that safeguard client information.
In conclusion, when considering the changes in a sector in continual evolution as e-commerce, e-procurement stands out as a process that is crucial for modern businesses. It is a good tool for increasing productivity and reduces expenses.