978-1292016016 Chapter 18

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PART 4

E-procurement systems and contract

management

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.