The internet has revolutionised how everything is done, including business. The number of businesses that are being transacted online has increased globally. One of the areas is electric procurement that is commonly known as e-procurement. Buyers and sellers have embraced it, and most companies are now doing their procurement online instead of the long paperwork that was being done before.
E-procurement Defined and Explained
Simply put, E-procurement is the process where goods and services are bought and sold online. It is different from e-commerce because it is used by people who are in the suppliers’ closed system. In short, it is only people who are registered within a system who will have access. E-procurement is sometimes referred to as supplier exchange. It can be:
- Business to business.
- Business to consumer.
- Business to government.
It involves the sale of services, work, or supplies through the internet and other networking systems.
The process of e-procurement has many other things involved. They include e-tendering, e-informing, e-auctioning, invoicing, contract management, and other chains of the business process. If the process is managed and implemented well, e-procurement can save businesses a lot of time and money.
Advantages of E-procurement
E=procurement has many benefits, both for the seller and the buyer. Some of the advantages that come with it are:
- Saves Money: having built-in tools to manage your procurement needs helps in reducing costs. It reduces the money that a company would have had to use in employing people to do the work.
- Saves time: The process of procurement can be complex and time-consuming both for the seller and buyer. If you have a system that is fully automated, like the one used in e-procurement, you end up saving a lot of time.
- Boosts transparency: having a system where everything is consolidated boosts transparency. Anyone who wants to access it can get due permission, including stakeholders, members of the public, investors, and anyone else who might want to understand the procurement process of a company.
- Shorter cycle for purchases: The wait time that buyers have to endure is reduced significantly with e-procurement. Everything is done within a short time, including the processing of the order, shipment, delivery, and invoicing.
- Increases sales: It is important for businesses to come up with a mechanism to increase their sales. E-procurement means that the buyers and sellers have a high level of satisfaction due to the increased spread of handling all aspects of the business process. This satisfaction is essential in boosting sales and increasing profits.
- Environmentally friendly: The environmental degradation being experienced globally means that every company must now take positions in ensuring environmental conservation is done. One of the ways to go about it is reducing paperwork and the amount of printing that companies do. E-procurements are done in a paperless way, making companies that do it environmentally friendly.
Most companies that have taken up e-procurement indicate that they have noticed improved performance in different parts of their operations, including employee satisfaction, efficiency, productivity and even customer retention.