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E-procurement: advantages vs disadvantages

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E-procurement, advantages vs disadvantages

The electronic management of purchasing and supply procedures is a recent concept, but one which was received favorably by many internet users.

If you want to gain efficiency in order to boost your business productivity do not hesitate to use it. Indeed, selling or buying goods via the internet saves time and money. However, even if this process has many advantages, can we say that it is free from any reproach? Let’s see all of this in detail.

The main advantages of setting up e-procurement procedures

The first advantage of this purchasing procedure lies in the savings the company makes during each transaction. E-procurement contributes to a reduction in the costs associated with commercial transactions between you and your suppliers, which allows you to save some money. In addition, the centralization of orders allows you to improve your purchasing management procedures. The outcome is improved performance in the procurement department and the increased productivity of its team who, in addition, benefit from the insignificant use of time-saving procedures.

Commercial independence is another advantage of e-procurement. With this process, buyers are excluded from the transactions they have to carry out every day. They can therefore focus on their core business, instead of spending a lot of time searching for the best suppliers and obtaining the best prices. One of the suppliers’ missions is to create an electronic catalogue showing the products in stock. The price of each product and any discounts can be negotiated. The supplier’s other objective is to support users, by giving them recommendations, in the event that they are looking for unreferenced products.

The disadvantages of e-procurement

To implement e-procurement procedures in your company, a careful evaluation of the purchasing procedures in force in each department is a prerequisite. It must be followed by the identification of suppliers serving that sector. Take time to consult with them at each stage of the project. At the beginning all these actives can be time consuming

Identifying the stakeholders in the supply chain is another important step. They can be buyers, order managers or financiers. Taking time to understand their work habits and their opinions when negotiating with them will prevent you from arousing disinterest on their part, compared to the use of the management tool for e-purchasing procedures.

The constraints imposed by this tool is another limitation of e-procurement. E-procurement software is guided by its workflow system. This is a set of procedures that, in the long run, can prove to be too restrictive for your agents. In addition, the system automatically registers what these agents do during the transaction and this can introduce errors that can affect the entire process if not detected and corrected early enough.

Another constraint applies to suppliers. This involves adapting its e-procurement tool to the customer’s order management tool. To do so, the latter must opt for the creation of an electronic catalogue intended for customers.

Create an interconnection between buyers and suppliers

There are many restrictive procedures in large-scale e-procurement projects. However, an integration between users and suppliers can be the solution to such challenges. Procurement specialists recommend that users must understand all the purchasing processes and the details of all transactions. However, these experts have a huge role of convincing future users of the usefulness of the system. This implies a change in work habits, even if they only take into account workflows because the smallest order is visible to everyone as well as the tiniest expense is listed in the software database.

However, the realities of e-procurement differ from one company to another. This is why developers creates personalized solutions to provide the exact solution to the needs of each company.

I'm a passionate full-time blogger. I love writing about startups, how they can access key resources, avoid legal mistakes, respond to questions from angel investors as well as the reality check for startups. Continue reading my articles for more insight.

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