The term e-procurement, although often described as merely the purchase of products and services electronically over the internet, is actually a far more in-depth and comprehensive approach to the entire procurement process.

It’s an innovative, technology-based system that utilizes a suite of electronic tools and products to expand the scope, efficiency, and accuracy of information at each step of the procurement process from e-catalogues to RFI’s, through to the final vendor agreement and ongoing cost control and monitoring.

The process is based on a comprehensive database developed and maintained by the e-procurement service provider containing detailed information on over 300,000 local and global vendors, as well as a library of specifications on products and services.

It provides the buyer with a considerable advantage in terms of classification of supplier product lines and capabilities, quality and performance history, safety record, environmental initiatives, and much more.

It captures data such as inventory utilization and reorder sequences, historical cost savings and supplier transactions.  It provides the tools to easily manage and organize communication, questions and answers, bids, current and previous pricing information.

Replacing the cumbersome, inefficient paper driven approach, e-procurement utilizes technology at each stage of the procurement process:

  1. The identification of spend requirements – including the review of past history and transactional analysis from both internal and external sources
  2. Establishment of specifications, or spend terms and conditions,  accessing the most appropriate outline of requirements
  3. Use of Software as a Service (SaaS) to allow for internet based solutions that are constantly improved and tailored for an organization’s approach and process.
  4. Vendor identification and qualification – on-line tools that  identify  the best sources of supply based on buyer defined parameters
  5. Use of various  software tools  to electronically capture  important information and transactions – surveys, documents, contracts, catalogues, ordering, and performance management

The result is an open, highly competitive, disciplined process that drives superior results:

  • Savings on the purchases of goods and services unavailable under traditional methods
  • Access to a greater range of vendors,  many not previously  known by the purchaser
  • Efficiency of process such that less time is involved in each sourcing activity allowing for more sourcing activities to be conducted
  • Increased scope and accuracy of  information
  • Data capture of specifications, contracts and other information, improving process and risk management as well as regulatory compliance

A well-managed e-procurement system is a highly efficient and effective process that will drive significant improvements directly to the bottom line.