Friday, 27 February 2015

E-Procurement, the simpler way for organisations to shop

Simply described, electronic procurement (e-Procurement) is the process by which businesses, consumers and even government departments purchase supplies, work and services over the Internet.
Its aim is to enable organisations to purchase products and services at the right price points, the right time and right place and in an efficient fashion, so that they can pass on these benefits to their clients, delivering a more compelling value proposition to them.

Driven by the current-day uncertain economic environment and the need to maintain a strong bottomline, both private and public sector companies, including retailers and government agencies are deploying strategies that help them increase efficiency by centralising sourcing in a one-stop shopping centre. Ultimately, the goal is to reduce sourcing costs of much needed goods and services.

Take the instance of retailers, for whom sourced products and services represents the single largest expense, accounting for the majority of each revenue dollar earned. Lowering sourcing costs therefore leads to a direct dollar-for-dollar increase in profits. Evolving a low-cost and highly efficient supply chain through e-Procurement is therefore becoming imperative to success.

Governments too are moving away from the costly supply chain model, embracing instead e-Procurement to reduce negotiation cycle time, step up efficiency, cut inventory carrying costs, improve gross margins and enhance productivity of key resources.

A growing community of government departments are now leveraging e-Procurement services to improve transparency (and reduce corruption) when making purchases.

In fact, governments the world over are now making e-Procurement mandatory. Online tenders are a reality across the globe and soon, the tendering process of governments will predominantly happen over the ‘Net, through well laid out electronic bidding processes.

For several countries today, e-Procurement remains a significant part of their e-governance roll outs, intended to improve the government-citizen interface through better, more streamlined services.

Some of the key components of e-Procurement, as defined by Wikipedia are indent management, eTendering, eAuctioning, vendor management, catalogue management, Purchase Order Integration, Order Status, Ship Notice, eInvoicing, ePayment and contract management.

Increasingly, organisations are also transforming their business/procurement processes from a Capex to an Opex model, opting for hosted e-Procurement solutions that do not require them to make additional investments in new hardware or software. E-Procurement solutions, delivered as SaaS are bringing the convenience of hassle free purchasing into the lives of companies.

E-Procurement service providers too are gearing up and making available these on-demand solutions that can be implemented quickly and customised to the requirements of customers. Vendors are offering end-to-end e-Procurement solutions that seamlessly integrate the business partners from the demand side and the supply side.

These e-Procurement solutions address all types of procurement requirements, from invitation to a quote, to rate contracts, tenders and direct purchase orders. Configurable with all functions in the Purchase Process Chain, they provide a full service buyer and seller interface, enabling business process optimisation and extensive reporting and analysis. In this way, e-Procurement is also supporting better decision making within organisations.

Owing to the fact that e-Procurement solutions are hosted and provided as a service, customers only have to pay for the capabilities used and the volumes of transactions executed.

Keeping in view the prevailing trends, Osmo IT Solution, too has developed a unique web-based e-Procurement platform called Lotus Procure. A simple and user-friendly application, it extends across the entire supply chain—from requisitioning to purchasing products online. The solution helps customers to consolidate their procurement activities across various formats resulting in an extremely cost efficient procurement model.

It is obvious that e-Procurement will soon be the way to go for organisations, keen to keep their budgets down, while shopping for the best.

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