Directorate of distance education

E Procurement - Challenges and Opportunities
E procurement is an automation tool for corporate purchasing 
process. The core definition is a business to business sale using the 
internet as the medium for order processing. E procurement is more than 

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the simple shortening of the supply chain with the Internet closing time 
and distance obstacles between suppliers and users of products.
Instead, it is a comprehensive integrated IT network that 
encourages purchasing discipline and leverages group buying power for 
all procurement responsible people in an organization.
E procurement systems consist of a number of different tools. 
These include automation of internal ordering processes, online catalogs 
from approved vendors, and an electronic Request for Proposal (e-RFP) 
process that leverages online auctions (e-auctions) to accumulate bids on 
providing goods and services for a specific project.
The reasons for implementing e procurement systems all boil 
down to one critical metric: ROI. According to the Aberdeen Group study 
in 2004, companies that move to electronic procurement experience the 
following benefits:
➢ Reduced off contract spend by 64%.
➢ Reduced prices by 7.3% for spend brought back onto contract.
➢ Reduced requisition-to-order cycles by 66%.
➢ Reduced requisition-to-order costs by 58%.
➢ Increased total spend under management of procurement group
by 20%
Other challenges to implementation include, as with any oth-
er new system fielding, push-back from users. Both internal users and
even some vendors can create friction and resist the change. For lead-
ers in organizations, it is critical to prepare both internal customers and
actively communicate with vendors to ensure they are on-board with the 
program.