As a Project manager it is critical to be on the forefront of technological changes and opportunities that will improve project procurements. The opportunity to reduce cost and improve the speed and accuracy of procurement can be found in Electronic Procurements (E-Procurement). The chance to reduce cost is very tempting; however, the risk associated with the opportunity must be considered as well. Project managers have an opportunity to conduct a procurement analysis, which takes a closer look at the advantages and challenges of this new method. “What we now call E-Business arose through the proliferation of the internet as a platform for inter-organizational systems (IOS) in the late 1990s and has had a particularly significant impact …show more content…
Project managers are able to dedicate less time on schedules and defining procurements, because E-procurements reduce the time and effort needed to make procurements. The cost associated with this form of procurement is normally much reduced.
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).
Pros: There are average expenses associated with purchasing e-Procurement solution. Future lower costs, and cost savings long-term. Integrates with current legacy system. Based on the integration of current systems, which staff is already using – no steep learning curve and less resistance to change.
Procurement practices so as to achieve corporate objectives. Scholars in the field of procurement management describe the subject as important strategic activities that ensure that sufficient materials and services are available for the smooth operation of a company. Also, procurement now plays a new role in corporate performance involving value generation, integration and networking, positioned as a core competency, a driver of business strategy, and enabler of additional business.
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
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
Additional companies are managing spend categories that now cover the global economy. Procurement experts are hence taxed with having to cope with many spends projects within regions where reliable supplier choices are restricted. This can make problems logistically and needs the procurement personnel to be better skilled plus suppler.
The objective of this white paper is to provide Project Managers with some guidance, and to offer an outline of
If you have ever been faced with the daunting task of procuring parts or services for a large industrial firm you will be aware that a professional procurement methodology is paramount to the success of the excise.
In most of cases, the client starts the procurement process by evaluating the benefits, costs and the risks of the project. Each method has individual strengths and weakness. “The client’s policies, resources, organisational structure and preferred contractual arrangements will all need to be taken into account in choosing the right procurement method for their project. (Deciding on
· Technology to Keep You Ahead of the Competition – Oracle Internet Procurement is a comprehensive solution built upon proven technologies, with a successful track record in major global companies. But large companies are not the only ones taking advantage of Oracle’s internet-based procurement solutions. Mid-size firms across all industries are also streamlining their procurement processes with Oracle
The idea for paying for goods and services electronically is not a new one. The search for more efficient ways of doing business is now driving another revolution in the conduct of business and in our concept of money. This revolution is known as electronic commerce, which is the symbiotic integration of communications, data management, and security capabilities to allow business applications within different organizations to automatically exchange information related to the sale of goods and services. With the advent of the electronic age the concept of value was transferred to plastic cards with a magnetic stripe which securely carried personal account information. These cards are
Through the company’s e-procurement system buyers are able to access a customized catalog of products and services as well as buy products that are not included in the catalog. So only providing information is not enough, the clients should also be able to pay online. Consequently, its necessary that to implement procedures that guarantee secure economic transaction, so as to manage online payments. There is a greater effort required when it comes to online procurement. E-procurement is where the client buys an e-procurement software that enables online purchasing and asks them to provide with an e-catalog. The benefit deriving from the e-procurement systems are mainly related to the costs control, as the e-procurement systems allow automatically transmission of orders collected and process them quickly. Whereas from the suppliers point of view, e-procurement will provide them an
The term e-procurement gained popularity around the year 2000. Emergence of the two competitors Ariba and Commerce One, companies that specialized in the support of electronic procurement for MRO products, changed the way indirect MRO spend used to be looked upon. Introduction of internet-based procurement applications prompted a change from a centrally organized procurement (central buying) department to ‘desktop procurement’ environment, where the employee in need of a product would initiate the purchase transaction electronically. With these two trends, ‘decentralized purchasing’ and ‘multi-vendor catalogues’, the conduit toward electronic support of the MRO buying process was paved. Thus, over the period, spend analysts have started observing carefully, to increase spend under management and implement better control over tail spend in order to reduce the amount of fulfilling formalities and time consumed in procuring these products.
Marthandan ,Malarvizhi , Tehrani (2016) Analysis the quality factor that significant impact on the success Of E-procurement implementation. This study has focused on critical success aspects of E-procurement when, it comes to implantation. This research paper leads through a structural equation model. Information gathered from 208 directors to convey quantitative method to research the relationship between E-procurement quality factor .In the outcome this investigation demonstrates that quality of organization culture affect the E-procurement. On the other IT infrastructure does not have critical relationship at E-Procurement success implementation. In addition, quality of knowledge has moderate relationship in the success of E-procurement but these variables do not influence directly to the dynamic capacity of Organization. In the suggestion, electronic service is most common need to precede industry environment and monetary development. We have to adapt the quality components that can apply on supply chain network at worldwide level to enhance success implantation of E-procurement.
Soriede (2002) mentions that, it is important to note that SCM is an integral part of procurement in the public sector. Therefore, it is used as a tool for the management of public procurement practices. However, despite the employment of SCM as a strategic tool, public procurement still faces enormous predicaments. These include, among others lack of proper knowledge, skills and capacity, non-compliance with SCM policy and regulations, inadequate planning and the linking of demand to the budget, accountability, fraud and corruption, inadequate monitoring and evaluation of SCM, unethical behavior, and too much decentralization of the procurement system.
At the time of designing the questionnaire process, we reviewed the comprehensive literature and adapted the relevant measures which were verified in the existing studies to formulate the measurement items. First, since every human task can be deputed to a software agent and such agent can perform any procurement activity on behalf of the users, that creates many difficulties to determine and measure all IAT applications in the procurement process. Consequently, we adapted the most important and common IAT applications to represent the measures of IAT usage at hotels FP from Khoo, Tor [13] and O’Leary [18]. Second, the FPPR were assessed by 24 items adapted from Quesada, González [42]. The five constructs of the FPPR, gathering information, supplier contract, contracting, requisitioning and intelligence and analysis, were assessed by 3,4,6,4, and 7 items respectively. Third, the procurement performance was also assessed by 21 items adapted fromQuesada, González [42]. The three constructs of the FPP, internal performance, supplier-related performance, and internal customer performance, were assessed by 7,7, and 6 items respectively. Additionally, all of the items were measured by five-point Likert scales ranging from “not at all = 1” to “to a great extent” = 5”. As a result, a preliminary questionnaire was designed.