E-procurement Increase Strategic Contribution

This report analyses how organisations can use E-procurement system in order to increase their strategic contribution. It discusses the benefits of E-procurement system such as reducing overall costs, increasing productivity, allowing transparent spending, standardising purchasing process, and increasing transaction speed.

Running head: E-PROCUREMENT 0
E-procurement Increase Strategic Contribution

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Table of Contents
Introduction................................................................................................................................2
Role of E-procurement System in Increasing Strategic Contribution........................................3
Reduce Cost...........................................................................................................................3
Standardised Purchasing........................................................................................................3
Increase in Productivity..........................................................................................................3
Transparent Spending.............................................................................................................3
Reduction in Errors................................................................................................................4
Effective Control over Process...............................................................................................4
Increased Transaction Speed..................................................................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
Traditionally, the process of procurement involved slow manual processes and systematic
procedures that are performed for handling procurement transactions in an organisation. E-
procurement has a significant impact on increasing role of B2B (business-to-business)
commerce. E-procurement is defined as the B2B system in which purchase, sales, process,
deliveries, and services are completed through the online based system. The corporations use
E-procurement through other information and networking systems as well including
enterprise resource planning and electronic data interchange. Many companies fear the use of
E-procurement since it is complicated and it increases the risks of various privacy breaches
and errors. But, along with disadvantages, E-procurement provides various advantages to
corporations as well such as high visibility over processes, increased productivity and easier
to get the supplies (Hsin Chang, Tsai, and Hsu, 2013). This report will focus on analysing
how organisations can use E-procurement system in order to increase their strategic
contribution.

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Role of E-procurement System in Increasing Strategic Contribution
Managers implement different policies in order to improve their strategic contribution since it
provides them a competitive advantage over others. Following are different examples of how
E-procurement system increases the strategic contribution in corporations.
Reduce Cost
Organisations use E-procurement system to reduce the overall cost of their operations. It
saves resources of corporations by leveraging volume buying, preventing duplicate spending
and saving the expense which is caused due to the management of paperwork. It is easier for
employees to record their transactions and manage them since they do it by using electronic
devices (Tai, Ho, and Wu, 2010). It avoids the complications of paper trail which improve the
speed of operations and reduce overall expenses.
Standardised Purchasing
In large companies with several departments, making procurement decisions is difficult and
time-consuming since there can be differences in their materials and the process of
purchasing. Implementation of effective E-procurement system assists in making purchasing
decisions electronically which makes the process of booking simpler for each department and
ensure that products are booked as per procurement standards (Ronchi, et al., 2010).
Increase in Productivity
E-procurement is a complicated process which requires some time to understand by managers
and employees. However, after leaning the system, it is a less time-consuming method than
traditional procurement. The managers find it easier to submit reusable tenders since they are
stored electronically which improves the overall productivity of the system (Trkman and
McCormack, 2010). Meanwhile, the lack of paperwork and use of templates can reduce the
time spent in the filling process which reduces the time taken in purchasing decision.
Transparent Spending
The managers find it easier to analyse report on procurement system if it is conducted
electronically. They can access it from different devices and ensure that they conform to the
organisational policies. It is also easier to track the spending in E-procurement system which
enables full reporting of the requisitions, order process, payments made and items purchased
which ensure the compliance of established contracts (Azadegan and Teich, 2010). Effective

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analysis assists in maintaining a level of transparency in operations which avoid any
misstatement or fraudulent spending.
Reduction in Errors
E-procurement system streamlined the electronic paperwork which makes it easier to check
for errors. The E-procurement system also assists in reducing human errors which improves
the efficiency of the operations. In this system, it is easier for managers to reference past
orders since whole purchasing history is stored electronically which reduces the overall
mistakes such as duplicate spends or booking of same order twice (Quesada, et al., 2010).
Effective Control over Process
E-procurement system increases the control of managers over the procurement process since
they can easily track the order of each division and easily reference previous transactions. E-
procurement system also provides the facility of auto ordering which reduces various issues
such as overstocking and late booking.
Increased Transaction Speed
E-procurement system is both efficient and time saving for corporations. Effective
implementation of E-procurement system enables corporations in efficiently handling the
tasks which assist in simplifying and supporting the purchasing process and increase
transaction speed. The cycle times in organisations speed up due to electronically enabled
relationships with suppliers (Gamal Aboelmaged, 2010). Effective E-procurement system
eliminates various unnecessary activities from the system which enable managers to focus on
more valuable and crucial tasks.

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Conclusion
In conclusion, organisations use E-procurement system due to its numerous benefits such as
lack of effective control over purchasing operations, lack of paperwork, efficiency in process
and improved productivity. There are various ways in which E-procurement system assist
corporations in increasing the strategic contribution such as reducing overall costs, increasing
productivity, allowing transparent spending, standardising purchasing process, and increasing
transaction speed. These benefits allow corporations to increase their performance and sustain
their future growth.

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References
Azadegan, A. and Teich, J., 2010. Effective benchmarking of innovation adoptions: A
theoretical framework for e-procurement technologies. Benchmarking: An International
Journal, 17(4), pp.472-490.
Gamal Aboelmaged, M., 2010. Predicting e-procurement adoption in a developing country:
an empirical integration of technology acceptance model and theory of planned
behaviour. Industrial Management & Data Systems, 110(3), pp.392-414.
Hsin Chang, H., Tsai, Y.C. and Hsu, C.H., 2013. E-procurement and supply chain
performance. Supply Chain Management: An International Journal, 18(1), pp.34-51.
Quesada, G., González, M.E., Mueller, J. and Mueller, R., 2010. Impact of e-procurement on
procurement practices and performance. Benchmarking: An International Journal, 17(4),
pp.516-538.
Ronchi, S., Brun, A., Golini, R. and Fan, X., 2010. What is the value of an IT e-procurement
system?. Journal of Purchasing and Supply Management, 16(2), pp.131-140.
Tai, Y.M., Ho, C.F. and Wu, W.H., 2010. The performance impact of implementing web-
based e-procurement systems. International Journal of Production Research, 48(18),
pp.5397-5414.
Trkman, P. and McCormack, K., 2010. Estimating the benefits and risks of implementing e-
procurement. IEEE Transactions on Engineering Management, 57(2), pp.338-349.