E-Procurement by Duaa Abu Mufreh

Information technology has radically changed the way that businesses operate. This technology enables fast and low cost communications and the ability to carry out commercial activity through the internet. One of these activities is procurement which now done through the internet and known as E-procurement.

The term e-procurement means business to business purchasing of good and services through the internet by implementing system that can connect companies and their business processes directly with suppliers while managing all interactions between them. These interactions include bids, management of correspondence, questions and answers. (Epiq Technologies, Inc 2010)

There are many types of e-procurement. First, web-based ERP (Enterprise Resource Planning): in this type they can generate recommended purchasing schedules in order to achieve an ideal just in time production cycle. Second, e-MRO (Maintenance, Repair and Operating Supplies).Third, e-sourcing: this is used to identify new suppliers for a specific category of purchasing requirements using Internet technology. Finally, e-informing: this is used to gather and exchange purchasing information between buyer and seller. (BPC, Article and glossary)

E-procurement brings many advantages for both buyer and seller. E-procurement helps seller to operate all day, every day and every hour not like the traditional procurement. Also it enables the seller to access the global marketplace, so it is possible to business with any business around the world that is connected to the internet without thinking of the distance between them. Moreover, it brings the opportunity to reduce the cost; this will reduce the administration cost and enable to conduct more efficient transactions. In addition, e-procurement helps seller to reduce the inventory level. (Business Education, 2010)

E-procurement also brings advantages for buyer. It helps the buyer to purchase the goods in a lower price than traditional purchase and this because e-procurement reduces the cost for seller, so the buyer will save his money. E-procurement also save the purchaser's time, there is no need to spend hours in shopping and going from one store to another to find the product that the buyers looking for, by using e-procurement they can stay in home and search for the product they need through the internet. (Business Education, 2010)

E-procurement also has disadvantages and constraints. There are financial costs, from computers to extra phone lines and either learning the skills of creating web pages or paying an outside firm. (International Trade Center, 1999-2011)
Moreover, there are many issues arise such as privacy of information, security of that information and payment details, there will be uncertainty if or not payment details will be misused, identity theft, contract. Another disadvantage is that e-procurement is often conducted using credit card facilities for payments, so as a result very small and very large transactions tend not to be conducted online. (Business Education, 2010)

Finally, e-procurement is a useful technology which brings purchasing into the new age of business, and it helps both buyer and seller to achieve their goals quickly and cheaply. If it is implemented appropriately, a suitable e-procurement system will benefit both buyer and seller.


Reference:

1- Epiq Technologies, Inc 2010. Available from: . [10 March 2011].

2- BPC, Article and glossary. Available from: . [10 March 2011]

3- Business Education, 2010. Available from: . [10 March 2011].

4- International Trade Center, 1999-2011. Available from: . [10 March 2011]