supplier exchanges is the business-to-business

or business-to-consumer or business-to-
government purchase and sale of supplies,
work and services through the Internet as well
as other information and networking systems,
such as electronic data interchange, electronic
payment systems, electronic workflow systems
and enterprise resource planning.
E-procurement systems are applications
MBA FT- 7601 designed to allow businesses use the Internet in
order to acquire the necessary goods and
Managing E-Business services. The term itself is quite broad and
actually includes several varieties of
applications. Part of a successful
implementation involves choosing the
Weekly appropriate application. In general, there are
three main categories of e-procurement

Assignment - 6 systems.
a. One type focuses on improving the
transactions and the decision-making
capabilities of the company. Businesses
Submitted By:
may deal with hundreds of transactions
Aayush Goyal weekly, but these applications simplify
the process and help foster stronger
F19-166 relationships between buyers and
suppliers.
Contents b. The second category of e-procurement
Weekly Assignment - 6 ..................................... 1 systems involves managing assets.
Systems in this category provide
E-Procurement and E-Procurement System
inventory management, maintenance
....................................................................... 1
scheduling, in-house product
Drivers of E-Procurement System ............... 1 availability, as well as other similar
E-Procurement Value Grid .......................... 2 services. These applications are useful
for businesses that need to keep a close
idea on the quality of their direct
E-Procurement and E- materials in stock.
c. The third category includes systems
Procurement System designed to optimize a company's
E-procurement is the electronic integration production operations.
and management of all procurement activities
including purchase request, authorization,
ordering, delivery and payment between a
purchaser and a supplier. It is also known as

1
Drivers of E-Procurement
System
a. Control: improving compliance,
achieving centralization, raising
standards, optimizing sourcing strategy
and improving auditing of data.
Enhanced budgetary control is
achieved through rule-based systems
that limit spending and improve
reporting system.
b. Cost: improved buying leverage
through increased supplier
competition, monitoring saving targets
and transactional cost reduction.
c. Process: rationalization and
standardization of e-procurement
process giving reduces cycle-time,
improved visibility of process for
management efficiency.
d. Individual performance: knowledge
sharing, value-added productivity and
productivity improvements.
e. Supplier management: reduced
supplier number, supplier management
and selection integration.
costs; this can help accelerate
development.
c. Inbound: This is the focus of e-
procurement with efficiency gains
from paperless transactions and more
cost- effective sourcing possible
through hubs or marketplace. A
strategic benefit is vendor managed
inventory (VMI) where supply chain
partners will manage the replenishment
of parts or items for sale.
d. Production: The integration of
systems managing manufacture with
the procurement systems used to
ensure that manufacturing is not
limited by poor availability of parts.
e. Outbound: This is management of
fulfilment of products to customers. It
is not usually managed by the e-
procurement system, but demand must
be evaluated by linking through these
systems to achieve efficient consumer
response (ECR).

E-Procurement Value Grid

This framework is used for evaluating the
benefits of e-procurement. This can also be
used to review strategy since it highlights
potential benefits in terms of process efficiency
and effectiveness and strategic benefits to the
company. Main dimensions of value
highlighted by the approach include:
a. Planning: This shows the potential for
an e-procurement system to increase
the quality and dissemination of
management information about e-
procurement.
b. Development: e-procurement
systems can potentially be
incorporated early in new product
development to identify manufacturing