Going e-procurement

Guys, do you know that procurement is something complicated in the business? You know like, bidding the price, get the suplliers and the bla and the bla.

So in this article, I'm gonna analyze the procurement process for an organization that quite familiar and then I'm going to explain the changes and problems involved with introducing e-procurement.

we're starting from the definition, what is procurement?
simply, Procurement can be defined as the purchase of merchandise or services at the optimum possible total cost in the correct amount and quality. These good and services are also purchased at the correct time and location for the express gain or use of government, company, business, or individuals by signing a contract.

The example is in my company, Inixindo. I'm gonna focus on procurement with preparing the book for training material. First, The sales confirm that the class will be conducted on the schedule day, and then the Operational division, in this case the Education then order the material with Purchase Order (PO) to the Learning Partner, such as ElementK for Cisco material, Oracle material and so on. the shipping takes about 2-3 days.

E-procurement is purchasing implemented through the Internet. It has an important role in achieving efficiency and effectiveness in business today. This results in a reduction in the intermediate costs and labor that are associated with conventional systems.

The e-procurement initiatives involve many issues such as security, the products to be procured and also the investment needed. Despite the various complications, an increasing number of companies are joining the trend owing to the enormous cost savings e-procurement can bring in.

One of the major issues concerning e-procurement initiatives is security. Companies usually desist from sending sensitive information over the Internet for security reasons. The growing number of cyber crimes has added doubts regarding the reliability of the Internet. Security measures such as authentication and encryption are therefore employed while passing sensitive information between companies. Another major issue concerning e-procurement is the type of goods that are procured through the online medium. Companies usually prefer to source smaller, inexpensive goods such as office stationery. Larger complex orders that usually take weeks or months for negotiation are done in the traditional manner. However, the rapid improvement in software technologies has encouraged some companies to employ e-procurement for expensive products also.

Companies launch e-procurement initiative with a view to improve the overall performance of its business machinery. Although the initial investment required in hardware and software may be high, the return is even higher. Some studies indicate that a company can enjoy returns as much as 300% of the initial investment, within three years.