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E procurement


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E procurement

  1. 1. Moving Procurement Systems to the Internet:The Adoption and Use of E-Procurement Technology Models<br />ANTONIO DAVILA, Stanford University<br />MAHENDRA GUPTA, Washington University in St Louis<br />RICHARD PALMER, Eastern Illinois University<br />Feb.2003<br />Presented by:<br />Ahmad Musa<br />Feb.2011<br />1<br />
  2. 2. Agenda<br />2<br />Study objective<br />Introduction about the study<br />Methodology<br />Analysis of the study<br />Conclusion and finding.<br />Evolution of e-procurement<br />
  3. 3. The purpose:<br />3<br /> To addressing the current status of e-Procurement technology and analyze how companies are moving into these technologies.<br /> Feb.2003.<br />
  4. 4. e-Procurement Technology<br />4<br /> Any technology designed to facilitate the acquisition of goods by a commercial or a government organization over the Internet that including:<br />e-Procurement software,<br />B2B auctions,<br />B2B market exchanges,<br />Purchasing consortia.<br />
  5. 5. Introduction<br />5<br />By the end of 90s, e-procurement technologies have been credited with providing significant benefits to companies who venture into them.<br />Predictions few years back indicated that migration from traditional to e-based procurement would grow exponentially over the first half of the decade <br />Recent market observations indicated that the adoption and integration of e-procurement technologies into the business mainstream is occurring at a much slower than expected pace.<br />
  6. 6. Methodology<br />6<br />A questionnaire has been prepared by a consulting firm specializing in e-procurement market research.<br />The data collected during the last quarter of 2000 and first quarter of 2001.<br />The database includes 168 U.S. organizations, mostly for-profit corporations and nonprofit organizations.<br />The organizations range from large multinational companies (AS 55 billion) to smaller regional organizations (revenues $10 million). <br />Sample companies had a median (mean) of 2500 (8088) employees.<br />
  7. 7. Analysis: Current adaption strategies<br />7<br />
  8. 8. Current adaption strategies<br />8<br /> Companies are approaching e-procurement technologies with very different strategies, the two main types are:<br />Aggressive strategy: frequently experimenting with various solutions.<br />Conservative strategy: selectively experimenting, typically with one technology. <br />
  9. 9. Economics of E-Procurement Technologies<br />9<br />Expected Investment & Saving.<br />Benefits:<br />Reduce transaction cost<br />Shortening the order fulfillment and cycle time<br />Reduce number of suppliers and price.<br />Risks:<br />Internal<br />External<br />Technology<br />Process<br />
  10. 10. Conclusions and Recommendations <br />10<br />E-Procurement and it’s applications are still in their infancy and going through growing pains. <br />Companies are mostly experimenting on a small scale, adopting a ‘wait and see’ strategy, but ready to move fast as technology and business uncertainties are resolved<br />The outcome may not be a single dominant design but a set of technological solutions that vary across market segments.<br />
  11. 11. Conclusions and Recommendations… cont.<br />11<br />E-procurement technologies will become an important element in the management of supply chains<br />E-Procurement technologies are still perceived to involve significant risks<br />Companies that have aggressively moved into these technologies perceive these risks to be lower than companies that have adopted a ‘wait and see’ approach.<br />
  12. 12. Evolution of e-Procurement<br />12<br />The new generation of E-Procurement is now on-demand or a software-as-a-service.<br />There are seven main types of e-procurement:<br />Web-based ERP (Enterprise Resource Planning): Creating and approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology. <br />e-MRO (Maintenance, Repair and Overhaul): The same as web-based ERP except that the goods and services ordered are non-product related MRO supplies. <br />e-sourcing: Identifying new suppliers for a specific category of purchasing requirements using Internet technology. <br />e-tendering: Sending requests for information and prices to suppliers and receiving the responses of suppliers using Internet technology. <br />e-reverse auctioning: Using Internet technology to buy goods and services from a number of known or unknown suppliers. <br />e-informing: Gathering and distributing purchasing information both from and to internal and external parties using Internet technology. <br />e-market sites: Expands on Web-based ERP to open up value chains. Buying communities can access preferred suppliers' products and services, add to shopping carts, create requisition, seek approval, receipt purchase orders and process electronic invoices with integration to suppliers' supply chains and buyers' financial systems. <br />
  13. 13. The future of e-Procurement<br />13<br />Advances in Internet and media technologies, now require a revisit of the traditional methods of e-Procurement. As the current market conditions tighten, e-Procurement facilitator companies need to reinvent themselves and devise newer methods, so as to achieve far greater reach with greater process simplicity and usability. Sheth, Raju. “E-Procurement - The Future of Supply Chain”, March 2009<br />
  14. 14. 14<br />Thank you<br />Q & A<br />