E-procurement

The term 'E-procurement' refers to tendering processes carried out online and through information and networking systems. It can be a highly-effective way of managing complex supply chains with multiple tiers of suppliers.

Very broadly, e-procurement might include:

• E-informing: The process of gathering and distributing procurement information both from and to internal and external parties.
• E-tendering: The process of tendering using online technology.
• E-auctioning: Web-based software that allows potential suppliers to compete online, in real time, to provide prices for the goods/services under auction.
• Vendor management: Application that acts as a mechanism for business to manage and procure staffing services.
• Catalogue management: The process of suppliers enabling product content to be made available to buying organisations in order for them to procure goods electronically.
• Order status: The ability to track orders online until delivery.
• Advance ship notice: Notification of pending deliveries.
• E-invoicing: Exchange of the income document between a supplier and a buyer in an integrated electronic format.
• E-payment: Payment system facilitates the acceptance of electronic payment for online transactions.

E-procurement software automates procurement-related functions, procedures and processes, reducing the need for paper-based and human processes. E-procurement platforms can usually be customised according to the needs of the user, often with accessibility through smartphones and tablet devices. It frees up an organisation’s procurement teams from low-value tasks, allowing them to focus on higher-value activities such as contract negotiation.

There are several potential challenges for an organisation implementing e-procurement. These involve the installation and integration of software with other enterprise systems, training requirements, liaising with suppliers to ensure a successful transition to the new system, and so on. However, there are some significant benefits that can be achieved. These include:

• Lower transactional costs.
• Better reporting through automation.
• Pre-qualification questionnaires (PQQ) can be dispatched and responses automatically evaluated.
• Tender cycle times can be reduced.
• The whole tender process can be scheduled, with milestones automatically managed and participants alerted.
• E-evaluation can appraise and give different weightings to bids automatically.
• The system can be extended to handle routine clerical procedures after contract award, such as e-invoicing and making e-payments.
• There can be simpler contract management as all documents can be stored centrally.
• Because of the ease of contacting, more suppliers can be invited to tender, meaning there is greater competition.
• Integrated data solutions allow for accurate cost estimates, and a source of accurate costing data in a direct feedback loop from the tender process.
• Substantial reductions can be made in paper and energy use.
• It can lead to closer, more structured communication and cooperation with supply chain partners.
• It streamlines change management as requirements are properly documented.
• It increases accountability by formalising and documenting the tender process, and creating audit trails.

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[edit] Related articles on Designing Buildings Wiki

• Bill of quantities software.
• Commercial management.
• Computers in construction tendering.
• Invitation to tender.
• Managing the procurement process.
• Procurement route.
• Supply chain management.
• Supply chains in construction.
• The benefits of e-procurement in construction.
• Tender documentation.