Purchasing and Procurement

Running Head: PURCHASING AND PROCUREMENT
Purchasing and procurement
Student’s Name
University Name
Author Note

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PURCHASING AND PROCUREMENT
Table of Contents
1. Introduction..................................................................................................................................3
2. Literature Review........................................................................................................................3
2.1 Meaning of E-procurement....................................................................................................3
2.2 Benefits of implementing e-procurement..............................................................................4
2.3 Challenges in implementing E-procurement.........................................................................5
2.4 The evolution and implementation process of E-procurement..............................................5
3. Company analysis........................................................................................................................6
3.1 Company background............................................................................................................6
3.2 Implementing E-procurement at Woodside...........................................................................6
4. Implementation of E-procurement at Woodside..........................................................................7
4.1 Redesigning of organizational structure on basis of service and product market.................7
4.2 The major benefits for implementation of the e-procurement strategies...............................9
5. Recommendations and Conclusion............................................................................................11
Reference List................................................................................................................................13

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PURCHASING AND PROCUREMENT
1. Introduction
Implementation of e-procurement strategy is of strategic and not tactical importance. this
policy can be considered as one of the most essential part of the e-procurement strategy of our
chosen organization. The enormous expenditure and the need for potential savings of the
company make the implementation of the e-procurement strategy very important. This paper will
discuss that many of the organizations spend up to 30% of the revenue proportion for purposes
like indirect procurement and that is consumed in non-production objective fulfillments. For
many of the UK based companies, this extensive pen and paper process consume $100 dollars on
an average only for the purpose of purchasing an order. This proportion is applicable for any
moderate sized firm and that is also applicable for any medium sized order of the organization.
The target of the report is to show how the utilization of the e-procurement strategy might help in
the cost savings which can have a boosting impact on the bottom line management of the
organization. However, the report will also shed light on the issue that despite the added benefits
of utilizing the e-procurement strategy, some organizations incorporate complex implementation
process because of which multiple functions as well as departments cannot be incorporated in the
development of impactful procurement strategies. These identified gaps are all addressed in this
research study in order to assimilate the solutions that can be helpful in bridging the gap.
2. Literature Review
2.1 Meaning of E-procurement
According to Davila et al. (2013), the term E-procurement implies purchasing of business
to business with the help of internet online through the digital media platform or digital network.
In other words the business transactions are often done with the help of modern technologies,

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PURCHASING AND PROCUREMENT
vendor partnership and business. The word E-procurement is often associated with terms like
supply chain management and supply change. The concept of E-procurement includes various
business activities like purchasing, warehousing, transportation and inbound receiving. The E-
procurement mainly has three approaches including e-sourcing, e-auction and e-procuring non
production goods and services. The interface with e-procurement is often associated or set up in
a way that facilitate or encourages commercial transactions which includes specialized invoicing,
shipping and payment tools, purchase orders.
2.2 Benefits of implementing e-procurement
As mentioned by Graham et al. (2013), the benefits and advantages of E-procurement are
more evident as it involves high level of understanding of many users. The major advantages and
benefits of using E-procurement are to increase the productivity of the organization, provide
visibility to the company which enables them to analyze their day to day transactions. It also
enables the company to provide the supplies to the users in an easier way. However the process
of implementing the E-procurement has many challenges and it is time consuming as it requires
time to fully accept it. The main advantages and benefits of E-procurement are reduction in the
cost, visibility of day of day transactions of the business, enhanced productivity, using and
implementing technologies and taking control over the business activities. As stated by Mose et
al. (2013), having a structured supplier relationship the costs of the company can be reduced by
leveraging the volumes and by implementing system improvements. E-procurement reducing
errors and eliminates paperwork. E-procurement ensures compliance and enables full report on
the requisitions, order processed and payments. According to Puschmann and Alt (2015), the
formal workflow in E-procurement ensures that there is correct level of authorization in every
transaction involved. The major advantage of E-procurement is that the software tools helps to