What is eProcurement?
The electronic procurement process, also known as eProcurement or supplier exchange, refers to requisitioning, ordering, and purchasing of goods and services online. It is usually a business-to-business (B2B) transaction.
The eProcurement system, unlike eCommerce, is a closed system accessible only to registered users. With eProcurement, customers and preferred suppliers can interact via bids, purchase orders, and invoices.
eProcurement connects suppliers and customers through a web interface or other networked systems. The enterprise's procurement department or chief procurement officer is usually responsible for setting policies governing e-procurement.
Origin of eProcurement
After the Electronic Data Interchange (EDI) came into existence, the concept of eProcurement started taking shape in the 1980s. Improvements in the EDI framework allowed organizations to develop online vendor catalogs a few years later.
eProcurement involves everything from evaluating and selecting suppliers to manage contracts and processing payments electronically.
What are the Benefits of eProcurement?
eProcurement connects external supply chains to enterprise resource planning (ERP) systems. Real-time information can be shared between ERP systems, finance systems, and supply chains to improve supplier information and transaction visibility. It also enhances procurement workflows, enabling end-user self-service and decentralization with control through company-approved catalogs and facilitating more frictionless processing of employee requisitions (orders for goods and services) and supplier payments.
Navigating the length and breadth of eProcurement can be challenging. Continuous training and information about the latest changes are necessary to stay updated. At the same time, businesses need to have a robust eProcurement framework to ensure that the company is in sync with the changing market ecosystem.
e-Sourcing, e-Tendering, e-Auctions and e-Marketplaces are significant processes of the overall e-procurement proposition.