The business value of e-procurement

When assessing the business value of e-procurement, we could consider 3 criteria: internal control, efficiency and effectiveness:

a. Internal control: companies can use e-procurement application to enforce compliance of corporate purchasing policies, ie who can buy what up to what budget limits
b. Efficiency: companies use e-procurement applications to streamline purchasing processes (ie as a form of process improvement) and reduce the administrative cost of corporate procurement. By reducing the corporate Purchasing Dept.'s time spent on clerical procurement duties, the Purchasing Department can spend time on more strategic activities in Purchasing and Supply (P&S), such as strategic sourcing and developing partnership relationship with important suppliers.
c. e-procurement applications enable companies to leverage their power in purchasing more effectively, e.g. by consolidating purchase orders from different departments, by using information generated by the e-procurement applications to manage suppliers, etc.

By using e-procurement, it is possible that companies can strengthen their Purchasing and Supply (P&S)function while their P&S staff have the opportunity to improve their significance in their companies by spendng more time on activities that are more strategic in nature.

References

1. e-procurement advantages: http://www.purchasing-procurement-center.com/e-procurement-advantages.html
2. On e-procurement: http://www.epiqtech.com/e-procurement.htm
3. On e-procurement solutions: http://www.bestpricecomputers.co.uk/glossary/e-procurement.htm