eProcurement uses web technology to purchase material or services.
Currently solutions typically involve a web enabled Requisition (using
Supplier catalogue or web site URL) through to electronically based
Purchase Order and payment system.
eProcurement solutions can also be based using eMarketPlaces
bringing together suppliers and buyers using one of various pricing
mechanisms (e.g. spot price, fixed price, auction, reverse auction).
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eProcurement
Business Case: "Improve the purchasing
process, save costs, outsource the requisition process, focus on
strategic sourcing, standardize the B-purchasing product and automate
the C-purchasing products."
Overview: Using the right eProcurement business model depends on the business requirements.
For instance, if strategic purchasing has already developed a
contracted/preferred supplier base then a corporate application
eProcurement system might be applicable (i.e. Oracle iProcurement,
Ariba Buyer, SAP EBP). If there is a requirement for one off purchases
of material then the use of third party such as portal exchanges, which
offer tools such as a reverse auction, may be applicable. Finally if a
procurement organisation has a major spend in a given commodity, or
wishes to work together with another buyer to maximise leverage, then
they might choose to develop their own web based eMarket.
Benefits: Automation of
requisition, approval and purchasing process. Aggregation of spend and
reduced maverick spending leading to better contract leverage. Reduced
process costs, lead time reduction & reduced inventory, improved
buyer search facilities, automated management information and audit
trails.
Outcome: Enhanced and integrated value chain. Outsourced Business Processes. Streamlined purchasing process.
Case Study:
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