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79
PART 4
E-procurement systems and contract
management
80
CHAPTER 18
E-procurement systems
Objectives of this chapter
• To introduce the concept of e-procurement
• To highlight some of the applications of e-procurement
• To evaluate the benefits and added value aspects of e-procurement
• To highlight potential barriers to the successful adoption of e-procurement
• To outline best practice implementation of e-procurement
• To outline relevant legislation
List of Cases, Research Boxes and Figures in this chapter
Mini Case Studies
• Shell
• IBM
• Powerlink
Case Studies
• Public procurement update
• Police procurement
• Leeds hospital goes live
• Lewisham gets its suppliers on board
• @UK e-procurement marketplace
• Schools to benefit from local, regional and national savings
Best Practice Boxes
• Online auctions: prerequisites
Figures
• Figure 18.1 E-procurement cycle (Gattorna)
• Figure 18.2 E-commerce in the National Health Service (NHS)
• Figure 18.3 Empowerment of users – changes in workflow
• Figure 18.4 Application of e-procurement
Instructor’s Manual
• Figure 18.5 E-procurement benefits
• Figure 18.6 Obstacles to conducting business online
• Figure 18.7 Summary of the five main savings drivers for e-procurement
• Figure 18.8 Typical reverse auction event
• Figure 18.9 E-auction – why buyers choose e-auctions
• Figure18.10 E-auctions – criteria for successful e-auctions
Teaching Notes
Procurement and supply is an activity that has usually generated and employed large quantities
of paperwork. This paperwork was necessary to communicate information from one function to
another in order to facilitate action, to indicate requirements to suppliers, and to obtain the
necessary goods and services on time and to specification.
The advent of information technology and more integrated software systems has radically
changed matters. Although the paperless office may still be in the future, and indeed may never
come about, simple transactions today are seldom paper based. The Internet has provided
further opportunities for electronic procurement and has made new approaches possible in the
last few years, with the almost universal acceptance of E-procurement.
Companies are realising that they have large opportunities to reduce their procurement
processing costs and acquisition costs, by revising their internal procurement policies and by
fully leveraging their buying power by using the Internet.
This chapter will explore some of the electronic applications which make up e-procurement.
What is e-Procurement?
E-Procurement is the term used to describe the use of electronic methods in every stage of the
buying process from identification of requirement through to payment, and potentially to
contract management. Or alternatively:
E-procurement includes a range of technologies that apply the speed of computer processing
and the connectivity of the Internet to accelerate and streamline the processes of:
• Identifying and selecting suppliers of goods and services
• Placing, receiving and paying for orders
• Assuring compliance with procurement procedures
• Consolidating purchases to achieve leverage
• Providing visibility of information between collaborative partners.
