The benefits of e-procurement in construction

Paul Heming, founder of procurement platform C-Link discusses the benefits of E-procurement.

The term 'E-procurement' refers to tendering processes carried out online and through information and networking systems, and may include; E-tendering, E-auctioning, E-invoicing, E-payment and so on.

The effectiveness of a contractual relationship is typically dictated by how well the initial procurement process has been completed and whether the written agreement fully reflects the intentions of the contracting parties. E-procurement can be an effective way of managing this process, particularly where there are complex, multi-tier supply chains.

E-procurement automates procurement procedures, reducing the need for paper-based and human processes. E-procurement platforms can be customised according to the needs of the user, often with accessibility through mobile devices. This frees up procurement teams from low-value tasks, allowing them to focus on higher-value activities such as contract negotiation.

Relationships and behaviour are strong influences for achieving successful outcomes. Companies who understand and appreciate each other will be more likely to work effectively together and this will apply equally when things are going well or when difficulties arise. E-procurement allows for early engagement and encourages positive interaction between the parties which improves the likelihood of successful project delivery.

Where price competition is the only criteria for procurement, this rarely leads to a harmonious and successful relationship. Rather, for the procuring party, it is much more important to establish whether a specialist has both the capacity and capability in terms of management and resource to deliver and, more importantly, the expertise and skills to undertake the contract works.

The most frequent cause of disputes in contracting is the inadequate definition of the scope of works. Time spent properly defining the contract works and compiling documentation pays dividends, enabling businesses to properly price the works and facilitating effective management once the contract is placed.

The UK government recognises this, suggesting as part of its Construction 2025 report, that the industry could make 'major efficiency gains from earlier engagement of its supply chain' and professionals are being encouraged to consider e-procurement to deliver greater productivity.

Benefits that can be achieved through e-procurement include:

• Lower transactional costs.
• Better reporting through automation.
• Automatic pre-qualification submission and evaluation.
• Reduced tender cycle times.
• Automatic scheduling of the tender process, with milestones managed and participants alerted.
• Central storage of contract documents.

Procurement platforms such as www.C-Link.com allow users to manage their project supply chain early and effectively, pre-qualify specialists and score them using a variety of construction specific criteria so that everyone knows exactly what they’re getting at the outset.

--Construction Link Ltd

[edit] Related articles on Designing Buildings Wiki

• Auction theory.
• Best value.
• Bid evaluation.
• Computers in construction tendering.
• Construction 2025.
• Cost led procurement.
• Due diligence when selecting contractors or subcontractors.
• E-auction.
• E-procurement.
• Invitation to tender.
• Invoice.
• Managing the procurement process.
• Pre qualification questionnaire.
• Procurement route.
• Reverse auction.
• RFx.
• Selection criteria.
• Supply chain management.
• Supply chains in construction.
• Tender documentation.
• Tender evaluation.