Assignment 4 (chapter 7)

E-procurement (electronic procurement, sometimes also known as supplier exchange) is the business-to-business or business-to-consumer or Business-to-government purchase and sale of supplies, Work and services through the Internet as well as other information and networking systems. (According to information shown in: http://en.wikipedia.org/wiki/E-procurement)

Basically, e-procurement processes can carries out good result in increasing profits as it can:

• Reduces purchasing time and cost

By having e-procurement, time to do purchase is shortened to a single click away and of course it is cheaper as it cuts the whole processes through computers without wasting cost on paperwork.

• Enhances budgetary control

By having this e-procurement we can easily limit the spending by submitting queries and/or telling the person in charge to control spending over several amount set and the reporting itself is improved and faster to get. Seeing those facts, the cost spent by companies can be reduced resulting in the increase of the profits.

• Eliminates administrative errors

Errors are usually connected to waste of money, and of course by limiting the errors will result in saving costs. How does the e-procurement system prevent it? The e-procurement system limited human errors by automation processes among two parties (do system standardization)

• Improves payment process (if the system is integrated with payment system)

The payment processes can also be automated as to have faster payment time and simplify the payment method which will result in lowering the costs.

But, if the concerns below are not taken seriously it will result in increasing the costs and losing profits:

• Choosing the right technology

The company has to be sure in implementing the technology, or otherwise it will be costly. For example, when the company doesn’t need ERP technology, then implementing ERP in the company is a disaster.

• Determining the right ‘e’ channel

Is more or less the same point to the point above, but when choosing the ‘e’ channel, the company should consider the size of the company as not to waste money on it. For example, the ‘e’ technology the company needed to implement is as much as ‘by phone’ system, then it is no need for the company to open a complicated and complete website and/or system.