2. Objectives Today
• Definition of E-Procurement
• E-Procurement Model
• Benefits and key to successful E-Procurement
• E-Sourcing / E-Contracting
• Challenges in the construction industry
• Tutorial
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3. Definition of E-Procurement
• The combined use of information and
communication technology through electronic
means to enhance external and internal
purchasing and supply management
processes.
• These tools and solutions deliver a range of
options that will facilitate improved
purchasing and supply management.
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4. Definition of E-Procurement
• However, the use of IT alone does not
necessary amount to the existence of e-
procurement within the organization.
• Many construction companies use computer
with basic word processors, spreadsheets,
account and administrative packages which
require analysis of users.
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5. Definition of E-Procurement
• E-procurement should enabled the user to
make “effortlessly analyze and model complex
decisions in real time; automate the contract
life-cycle management including awards,
rejections, amendments and renewals and
collaborate with the supplier; using a central
system enables people to collaborate easily”
(Bailey et al., 2008).
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6. E-Procurement as the application
of IT in Procurement Process
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Information
Technology
Application
Examples:
- word processors
- spreadsheets
- accounting
software
- administration
software
- internet
- network
E-Procurement
E-sourcing
E-requisitioning
E-intelligence
Procurement
Process
Typical Cycle:
- Define
requirement
- Supplier
scouting
- RFI/RFP/RFQ
- Supplier
qualification
- Tendering/bid
ding
- Negotiating
- Selection
- Place order
- Delivery
- payment
7. Stages of e-Procurement in
Construction
• E-informing
• E-tendering
• E-awarding
• E-catalog
• E-invoicing
• E-contracting
• E-payment
• Source: Tran (2014)
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8. Benefits of E-Procurement
• Quality
- Preferred suppliers is used (Contractor)
- Reduced processing errors
• Cost
- Purchasing power is leveraged (benchmark
and comparison)
- Reduced processing cost
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9. Benefits of E-Procurement
• Process Efficiency
- Reduced administration
- Reduced errors
- Reduced cycle time
- Reduced inventory
- Staff focus on value added activities
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10. Keys to successful E-Procurement
• There must be a strategized system in-place
before the implementation of e-procurement
• The information flow must be an efficient and
effective
• Relationship management and continuous
improvement
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11. E-Sourcing / E-Contracting
This is the ability to identify sources of supply
online and to make contact with them over the
world-wide-web (significantly reducing cycle
time)
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Definition
12. E-Sourcing / E-Contracting
Benefits:
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Cost Reduction
Benefits to the
Supplier
Supplier
Consolidation
Access to improve
sources of supply
Enhance efficiency
of RFI/RFP/RFQ
Processes
13. RFI / RFP / RFQ
• A Request for Information (RFI) is used when you
think you know what you want but need more
information from vendors.
• A Request for Proposal (RFP) is used when you know
you have a problem but don’t know how you want to
solve it.
• A Request for Quote (RFQ) is commonly used when
you know what you want but need information on
how vendors would meet your requirements and/or
how much it will cost.
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17. Discussion
• What are the challenges for a construction
company to implement for e-procurement?
• What are the benefits? Examples.
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18. Challenges in the Construction Industry to
implement E-Procurement
• Complex and traditional
• Fragmented industry
• Cost consideration
• Lack of knowledge about the software
• Lack of training
• Requires integration with existing work and suppliers
• Culture of change
• Requires provision for maintenance
• Reluctant to share information
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