Disadvantages Of E-Procurement

e-commerce is all about using the Internet to do business better and faster. Most businesses

Electronic business, or e-business or "electronic commerce"(55) has increased exponentially because so many businesses are on digital networks. Major business transactions are completed on the enterprise. Digital networking is transforming businesses relationships with the companies customer, their employees and relationships with suppliers and partners in business. E business technology is also improving the way business is done in the government. The government uses the Internet to enable and increase business

Through e-Procurement system we can improve redundancies in the business process and operations, gain in productivity by upgrading procurement processes. Cost savings by reducing processing time, rationalization of a large number of BAL suppliers and maintaining relationship with Key Suppliers.

E-procurement has had an increasingly important role in business-to-business(B2B) commerce. Web-enabled B2B e-commerce enhances inter-organizational coordination resulting in transaction cost savings and competitive sourcing opportunities for the buyer organization. E-business has radically altered the ways in which firms interact with their suppliers(Phillips 2003). Continued improvements in Internet technology connectivity provide an opportunity to make procurement for goods and services more transparent and efficient. Six forms of e-procurement applications

They are an important benefit to e-commerce because they can be used to produce reports and also risk analysis. These portals can be used to information on all the business levels and functions. The information can be accessible at any time, which can save money and time for the company. The collaboration, knowledge management, and e-commerce are all vital ingredients in improve the performance of supply chains and organization.

The continued advances in procurement and information technologies, have presented BAL an opportunity to build on initiatives put in place since 1999. The P-Card initiative has produced cost savings through the shortening of procurement process for non traceable generic goods, but new e-based initiatives must be sought to further stream line the bidding and contracting process.

One major pitfall of electronic contracting is the potential legal impact that can ensure from such negotiation. Currently, not all states have an electronic contracting law. As such, these contracts may not be recognized by everybody. Also, the "admissibility of evidence of an electronic record or signature may be unconstitutional; contracting parties should consider adding clauses expressly providing for the admissibility of the constituent electronic records" (Reid & Priest). Another pitfall that could ensure from electronic contracting is the huge possibility of fraud and mistake which is minimized in traditional contracts. Also, ecommerce information has the potential of being used improperly.

E-government solutions facilitate trade, both internationally and within the vast country, and it is help to speed up processes, thereby increasing the ease of doing the business.

E-business uses the digital technology to optimize the business activities of organization in order to increase the efficiency and effectiveness of operation and gain competitive advantages. E-business provides the solution that allows the organization to instantly share database, information of products and services, financial figures and data and nearly anything else that the organization may need to operate the business activities effectively and efficiently (Nguyen, 2013). E-commerce which is the abbreviation of electronic commerce is the subset of e-business. It focuses on the online transaction which includes selling of products or service by using computer network, primarily the Internet.

It is necessary to name the benefits and advantages of e-procurement. The main benefit is to engage public sector into helping provide governmental requirements. E-informing as well as e-tendering and e-auctioning bring greater transparency will by the publishing of notices and contract electronically. The public can check and control the procurement process through official websites (Novriyanto, 2008). As long as all the procedures are transparent enough, it makes all the parties, either the government or the suppliers, be accountable based on activities they are doing, corruption reduction happens as well. Since internet and communication technologies removed the geographical restrictions, access to new suppliers are more available and thus marketplace is competitive. Simplification of transaction processes makes ordering and approval faster One good example in this area is Chile. In Chile, the ChileCompra e-procurement system has been used to allow government officials and citizens to compare the costs of bids to and services purchased by the government. The prices of more than 500 outsourced services from over 6,000 providers are included in the system (??, ??). In addition to reducing corruption, this system expanded the number of small businesses that could participate in the government bidding

Apart from the direct costs reduction the implementation of e-procurement influenced the company’s indirect (administrative) costs which mainly concerned the amount of paper work of the managers (thanks to the Philips e-procurement paper work was reduced by 100 men-years in Europe), the auditing process (after the implementation of e-procurement the process became semi-automated), acquiring and disposing goods (after the year 2000 the inventory expenditures of Philips decreased globally by 15%) and overpayment while purchasing the materials (the introduced e-procurement allowed managers to observe the purchasing prices in real

The last is to stabilize relationship with suppliers. Take Wal-Mart for example, whose e-commerce system allows the

The second perspective considering the Procurement stages is also noted in the book “Digital Business – Concepts and Strategy” as, “Three types of B2B exchanges often illustrate the history of the relationship between a seller and a buyer: new buy, modified rebut, and straight rebuy” (Coupey, 2005, p. 367) which takes the vantage point of procurement activities. In a new buy procurement situation is encountered by building new exchange relationships where the burden of all the procurement process stages (Information

E-procurement can occur in a Simplified Competitive Contracting method and a Formal Competitive Contracting Method. As the name suggest the simplified provides much easier way complete a transactions. This option would include following methods: purchase cards, petty cash, auctions and reverse auctions, net marketplaces, vertical exchanges, horizontal exchanges, and web portals (Garrett, 2010, p. 69). These methods provide a simplified approach to electronic purchases. Research has indicated “[t]he potential effects linked to the adoption of e-procurement solutions are estimated to be worth a 7-10% reduction in overall project purchasing cost, essentially due to greater efficiency in internal process, a shortening of project duration, and reductions in non-conformity and purchase prices. (Cagno, Di Giulio & Trucco, 2004, p.24). With the addition of an E-procurement plan, buyers are able reduce paperwork and other overhead cost. “Implementing a Web—based e-procurement system for direct procurement not only makes the operational processes of trading partners more effective, but it also makes inter-organizational coordination among trading partners more efficient” (Tai, Ho, & Wu, 2010, p. 5401).

There are a large number of E-procurement tools that could be distinguished in the marketplace (de Boer et al., 2001). Some of them are already well developed and highly accepted in the marketplace; nonetheless, there are numerous E-procurement tools that are immature and require further development (Wang, 2006). For the purpose for this paper, we aim to focus on the E-procurement tools that are widely accepted in the government and private sectors. The four most common E-procurement tools being used consist of E-Sourcing, E-Tendering, E-Reverse Auction and E-Collaboration (Boer et. al., 2001). The description of the four E-procurement tools would be provided, following by comprehensive explanations and visual diagrams to demonstrate how